Hopes of a RadioShack revival fade with stock to be delisted
Feb. 04, 2015
FORT WORTH, Texas (AP) — The signal from RadioShack Corp., the company that introduced the first mass-market personal computer, is fading after years of heavy losses and the suspension of its shares.
The beleaguered retailer, which thrived through decades of changing home electronics technology, had tried to remind consumers of its history by infusing its stores with a heavy dose of nostalgia.
At a newly retooled store in downtown Fort Worth, less than a mile from its corporate headquarters, camera drones and Bluetooth speakers are displayed next to clunky early model portable phones and computers.
A do-it-yourself wall of resistors, knobs, wire and other parts in the middle of the store is a throwback to its beginnings as a radio-parts retailer.
But hope of a turnaround is dissipating for the nearly century-old Texas company as the New York Stock Exchange seeks to delist it after suspending trade of its shares on Monday.
Now, store managers are being told to ship big-ticket items to more profitable locations while RadioShack keeps closing stores. Half a dozen store managers told The Associated Press they were instructed not to talk about the company's dire financial straits.
After warning of a possible bankruptcy in September, RadioShack received rescue financing from a group of investors led by hedge fund Standard General. But its CEO recently warned it might not be able to find a long-term plan to stay afloat.
Analysts say online retailers including Amazon contributed to RadioShack's decline.
"Every year, RadioShack's core customer grew a year older and new consumers realized they would never set foot in one," said Wedbush Securities analyst Michael Pachter.
RadioShack spokeswoman Merianne Roth declined to comment.
Long known as a destination for batteries and obscure electronic parts, the company has sought to remake itself as a specialist in wireless devices and accessories.
In a management shake-up, RadioShack hired Walgreen Co. executive Joseph Magnacca and former Treasury Department adviser Harry J. Wilson to help with its turnaround efforts. It worked with popular brands like Beats Audio and redesigned almost half of its U.S. locations — some 2,000 stores — in an effort to entice younger shoppers.
But growth in the wireless business is slowing, as more people already have smartphones and see fewer reasons to upgrade.
RadioShack, which has not turned a profit since 2011, still operates nearly 5,500 stores and employs about 27,500 people worldwide, according to its last annual report filed with the U.S. Securities and Exchange Commission.
The company, founded in Boston in 1921, began as a distributor of mail-order ship radios, ham radios and parts. In the 1950s, it entered the high-fidelity business, touting a device called the "Audio Comparator," a then-novel switching system that allowed the customer to mix and match components and speakers in the listening room.
In 1977, RadioShack started selling the TRS-80, known affectionately by its users as the Trash 80, making the company as important in the microcomputer space as IBM or Apple.
Fort Worth financial planner Jay Ellis fondly remembers setting up walkie-talkies from kits sold at RadioShack.
"I think it's a shame. They were the go-to place for electronics parts," he said. Now, "it seems to be a mobile phone and remote-control toy store. If they're still selling kits, they're not marketing them very well."