Why your Dad is mourning RadioShack

The dusty, dying retailer once represented the cutting edge of computing.

By TheStreet.com Staff Mar 5, 2014 2:09PM

People walk past a RadioShack store in Manhattan on July 26, 2012 in New York City (© Mario Tama/Getty Images)By Dana Blankenhorn, TheStreet


If the old guy in the office looks wistful today, or your dad seemed a little nostalgic over his breakfast eggs, the reason may be RadioShack (RSH).


Why should anyone care about a musty, dusty, dying retailer that Tuesday reported an operating loss of $166 million for a single quarter, a $400 million loss for the full year and a 19 percent decline in same-store sales? One that also plans to close up to 1,100, or about one-fifth, of its stores?


Especially one that TheStreet's own Herb Greenberg has a "hate affair" with?


Well, it's like this, kid.


TheStreet.com logoBack before "Star Wars" came out, when Fleetwood Mac was a supergroup, when I had some hair on top of my head and when hobbyists built their own computers from parts, RadioShack was an important place.


It was a local, franchised version of California's Homebrew Computer Club, a place where early geeks, even in Texas or Oklahoma, could gather to swap stories, search for parts and network with one another.


Once Apple (AAPL) defined a retail PC as a TV, typewriter and something like a tape recorder, RadioShack's Tandy brand was in the market with the Tandy RadioShack (TRS)-80, part of the early "trinity" of PC makers alongside Apple and Commodore.

My favorite laptop of all time remains the TRS Model 100.


The Model 100 weighed just three pounds. It had a keyboard with real travel in it, an internal modem, and it ran on AA batteries. In 1985 I could get all my stories written on it, and once amazed an audience in Japan by delivering copy from Tokyo, first to an editor in San Francisco, then one in London. I advertised myself as "Have Modem, Will Travel."


OK, it had only 24 kilobytes (12 pages) of memory, and the "screen" was just 40 characters across and 8 lines down, but it did what I needed done.


So what happened? There are lots of theories on that.


First RadioShack couldn't scale with the PC revolution. When IBM (IBM) launched its PC, RadioShack was stuck with incompatible CP/M machines.


It became an importer (the Model 100 was actually made by Kyocera in Japan), then slowly evolved into a parts store. By the early years of this century I would sometimes find myself dragging the kids into a musty RadioShack in a mall, searching for a cable or an obscure battery. I think they were scared of the place. It was next to a movie theater. They didn't know what a movie theater was, either.


As late as December 1999, RadioShack was worth almost $77 per share. The next year it traded for some time in the 60s. Then it slowly bounced downward, each peak lower than the last, each trough more worrying. But it still paid a dividend until 2012. On Wednesday morning, it was trading at about $2.20.

For some reason, RadioShack threw up a Super Bowl ad this year, filled with celebrities from the 1980s such as Hulk Hogan and Alf. The ad got good reviews, and lots of mentions on social media, but the horrible quarterly numbers were already in.


Some analysts think RadioShack's demise represents the end of retail as we know it. Amazon.com (AMZN) is taking over the world, they say.


Other analysts ask why RadioShack hasn't reinvented itself as a "maker space," devoted to 3-D printing, which they see as analogous to the PC revolution of RadioShack's heyday.

Certainly RadioShack's attempt to make itself a haven for mobile device lovers seems doomed. Phone companies have their own stores, cool kids go into Apple Stores, and there's nothing special about the company's mobile offerings that anyone would cross the street for.


The fact is that, like the celebrities it brought into its Super Bowl ad, RadioShack got lucky once. It fit the zeitgeist of a time, then woke up one morning to find its time was past.


So give your dad a hug today. When Yahoo (YHOO) gets bought out by Disney (DIS), or if Facebook (FB) one day crashes and burns, you'll understand how he feels.


At the time of publication the author owned shares of AMZN, YHOO and AAPL.


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60Comments
Mar 5, 2014 5:44PM
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When I was a kid I remember getting the electronic project boxes, the ones where you could make bunches of different things by just moving the wires from one spring connector to another.  As I grow older I bought their hard wired projects.  They really gave me an education on electrical circuits that I still use today.


My oldest son graduates from Colorado School of Mines this spring with a degree in electrical engineering and one of the first circuits he worked on was a Radio Shack set. 


Many of us engineers can credit Radio Shack with fueling our interest in the sciences.


Thank You Radio Shack.


Their turn down could be related to the dropping numbers of young people going into engineering and other hard sciences.

Mar 5, 2014 3:23PM
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the problem for radio shack is that there is nothing to re-invent itself to.  perhaps the 3d printing is best but that is a niche market that is expensive right now. it's not exactly going to drive customers in the door unless they sell printing services like Staples' copy desk.  but then you have to have trained people who know the product to accomplish this.  Retail isn't setup for this.  Apple is getting away with it but that is an anomaly. RS isn't a brand that is introducing it's own innovative products and selling them at inflated prices. it's just re-selling products at higher prices than people can purchase online.  However, radio shack has overhead and selling $2 switches and $10 cables isn't going to cover the overhead without mass crowds, which they don't have. So they really are in a bad place.


Mar 5, 2014 4:04PM
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Welcome to Radio Shack. We don't sell radios and we are not in a shack. Are you happy with your current wireless provider?
Mar 5, 2014 6:44PM
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Ah, Radio Shack. The kings of marketing. I remember as a ladd. I would go to Radio Shack to purchase a part. I always paid cash.

The Salesman would ask me for my name and address, so I could be bombarded with sales literature in the mail. I always told them my name was "cash". The salesman would almost start crying, and told me he would lose his job if I didn't give my name and address. I always asked them to let me know where they would be working next.

Then, the perfect situation happened. I was able to give them the name and address of my then wife's boyfriend.

Mar 5, 2014 4:43PM
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Will that be all sir?  What is your zip code?
Mar 5, 2014 6:57PM
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Back in the day you could go to Radio Shack and pick up a diode, fuse, or other miscellaneous item needed for whatever project you were working on.  The catalogs were always fun to peruse and had many a kit to peak a persons imagination. Now days it's all about apps, forget that hands on stuff, and if it breaks throw it away and get a better one.
Mar 5, 2014 6:30PM
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Well I would  of continued shopping there but the sales people could care less if  I was there..the last time I went in I asked for a connector and the person  said it is old and not in use anymore.. I shook my head and went to a  hardware store and found what I wanted..before that the sales people stood around talking to each other and never offered to help..
Mar 5, 2014 4:52PM
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They should've taken their botique store idea and put it online.  Computers, electronics & parts are still sold in mass volume, which is what their specialty is, but nobody wants to drive to the store unless they need that emergency $1.99 part.  Like the article says, putting their efforts into cell phones was stupid.  The ceo failed.

Mar 5, 2014 7:37PM
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Used to buy Heathkit items to build oscilloscopes, radios, tape recorders, .just about anything. That was when the radio in Radio Shack meant something. The 1950s and 60s were good to us.
Mar 5, 2014 6:58PM
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The era of cheap, "disposable" electronics that cost more to repair than to buy their replacements, has pretty much doomed Radio Shack.  Back in its heyday, Radio Shack was the place to go if you needed a vacuum tube for a TV, radio, or record player, as well as needles for those record players...as well as their ever-popular batteries, including that card that lets you get one free battery a month.   If you had the technical know-how, you could buy kits that allowed you to solder your own electronics together, as well as to buy things like transistors or knobs for electronic items.  Radio Shack is pretty much the last of its kind...an old-school electronics store, which survived long after competitors such as Heathkit, Lafayette, and Olson Electronics went out of business.  Today, with everything electronic cheap and "disposable", nobody bothers to even try to fix these things...but RS did carry (or could order) the parts you needed if you were inclined to do so.  Today, Radio Shack is just another cell phone/gadget store, selling things that could be found elsewhere, often for less.  Still, they had (and still have) their niche.
Mar 5, 2014 4:17PM
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To the writer of this article: You had me but you lost me at the end.  Nobody will miss Yahoo let alone remember Yahoo when they do finally crash and burn.
Mar 5, 2014 4:54PM
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worked for Tandy Radio Shack several years ago as a New Store Designer.  I left well before the big box electronic store boom and the evolution of Amazon.  It was a great place for cables and batteries and connectors for home made electronics.  My last year they had a contract with RCA to sell only RCA TV's and entertainment systems.  Then the birth of the Big Box, Best Buy and the like, all of a sudden you don't need cables or connectors and you can get Batteries for anything anywhere these days.  Then the internet which soon will kill the Big Box stores too. 

Radio Shack was one of those places in every town, like a Dairy Queen but they were not able or willing to look beyond their little box environment and grow from RC cars.  Too bad!

 

Mar 5, 2014 6:33PM
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Besides getting clobbered by internet sales, Radio Shack hurt itself by selling sub-par merchandise at top-rate prices.  And the commission breath on the salespeople was awful (I am in sales). It literally chased away its customers. 

Add that it paid poorly and the people working their hated their employer, so it had high turnover and thus many unqualified people serving you.  One guy sold me the wrong kind of USB device for a laptop and fried my motherboard, for example.  I often knew more about what I was trying to buy than did the "pro" working in the store, and I am no electrician.

With all of these detriments, is a wonder it has stuck around so long.
Mar 5, 2014 7:22PM
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Maybe Radio Shack should create an outreach program, teaching kids about electronics, in our schools, allowing them to get an idea of how electronic things work, not just by their programming, but by allowing kids to understand what those programs do, to make a relay open, or close, enabling a counter, or stopping the count of a 74161 chip! Crystal control and power supplies are other interesting things radio Shack could provide our do it yourself young and learning oldsters, tired of buying a pre=made product, with no idea how electronic things actually work! Perhaps we have lost the connection with Radio Shack, because our new generation never has to build anything, not already made for less in China!  Radio Shack has provided me with spare parts for decades, and I have seen their stores seek to provide us with pre-made computers, cellphones, and amplifiers, instead of selling us the parts and the instructions for us to make our own stereo Bluetooth transmitters, instead of the monoral jokes they try to sell us today at tens of times the price of the parts! Radio Shack needs to get some interested folks together to have people visit their stores and learn a new craft or trade, rather than just selling us batteries! HOw fun it would be for kids to be sold a radio kit, in a monthly program, to build, giving them something that engineering companies could appreciate after they finished a Radio Shack trade school for Engineers, for example! Competing for market share with big box stores won't happen, while radio Shack is the place where they should never have carried their own inferior line of batteries, and switched up to Duracell distribution decades ago!


Bad choices means bad results, and Radio Shack lost its vision, and needs to remember why we went there while we were growing up, even if Radio Shack has to start manufacturing toaster repair parts, and carry coffeemaker thermostats, to fix the things we usually throw away, when a dollar part and a soldering iron and a screwdriver was all that was needed to fix it. The feeling of building little gadgets should continue to be their greatest asset, as well as providing a tool line for telephone and electronic workers!


Come on Radio Shack! Don't give up! Rebuild! We can still find uses for you and our kids need access to your parts, and leds. and cables, and all the rest of the myriad items you always carry!  You need to advertise, or have your people come out and visit the kids in the neighborhoods, offering starter projects to get them interested! You carry them in your stores, but no one really knows about them! GIve some away as gifts, build a clientel from the return business! One step at a time! Sociopathic greed need not apply! It is Radio Shack, not Fry's, or Dell Computers, after all!

Mar 5, 2014 6:53PM
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I still love radio shack, too bad things are tough for them.
Mar 5, 2014 7:34PM
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I have to say that I'm not among those who might be mourning the closing of the Radio Shacks.  I just never liked the store.  I've been there many times over the last 40+ years, but not in the last 20 I'll bet.  One thing I really hated about those stores was this.  I might be at the mall doing some shopping.  As I'm about to leave because I've finished my shopping I remember that I need a couple of batteries.  Great.  There's a Radio Shack.  I take the batteries to the counter and what do you think the clerk needs from me?  Before he or she can begin the actual sale process they first need my address and name.  Are you serious.  I just want to give you the $3 and leave.  I don't want to be on your mailing list.  I want to go in, get what I want and leave.  It's not enough that these days we have to wait while they plug in the information to do their inventory, no, now they want us to provide them our address.  So that experience was 20+ years ago and I haven't been back. 

Mar 5, 2014 4:41PM
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You know they wouldn't sell me parts for a timed detonator!
Mar 5, 2014 6:22PM
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So why doesn't RS expand its online services, and phase out the unprofitable stores?  Another example of a retailer failing to keep up with the times.   I guess it will go the way of Woolworth's and A & P stores.
Mar 5, 2014 7:30PM
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Anyone old enough to remember: Ages ago didn't Radio Shack evolve from a leather goods store in Tucson, AZ? Was that Tandy Leather?
Good memories of Radio Shack for the many visits wherever I lived in the USA for little electronics parts, but  that I years ago stopped needing.

Mar 5, 2014 6:38PM
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