Rodney Johnson | Wednesday, March 05, 2014 >>
Buffy the Vampire Slayer is a campy movie from the ’80s.
In the original — not the TV series — Donald Sutherland was the mentor, while Rutger Hauer was the bad guy. The main character was Buffy, a high school cheerleader who finds out she’s a modern-day vampire killer.
At one point, she stabs Hauer’s chief bad guy, played by Paul Rubin of PeeWee Herman fame, and he dies… slowly. In fact, he did a back and forth, up and down, weird contortionist act to simulate dying. It was over the top, even for a film that made fun of itself. Eventually, you just wanted Rubin to die already.
That’s my message to RadioShack (RSH): Just die already.
The company has been a walking corpse for the past three years.
Sales are declining while losses mount, and no one can exactly figure out what RadioShack does. It doesn’t sell CB radios anymore, or at least I don’t think so. It’s trying to eliminate the thousands of little electronic components that made them the go-to place for hobbyists.
As best I can tell, RadioShack is trying to become the kiosk at the front of Best Buy, the little piece of store footage where you can go to get a phone or tablet along with the covers, chargers, keyboards, and other accessories that go along with such devices.
The problem is, that square footage already exists. At Best Buy. And Verizon. And AT&T. And Sprint. Oh, and Apple.
So what is it exactly that RadioShack is going to do that isn’t already on display somewhere else?
I’m sure management has a plan, but other than painting the walls white and throwing out old inventory, as indicated in its Super Bowl ad, I don’t know if consumers are aware of the company’s plans… and that’s a problem.
You need consumers to buy your stuff. And they’re not doing that at the Shack.
RadioShack was counting on a stunning holiday season at the end of 2013. It even secured hundreds of millions of dollars to fund its turnaround and inventory makeover ahead of the selling season.
When the dust settled and the sales were tallied, the numbers were stunning alright, but for the size of the loss.
For 2013, the company posted a $400 million loss.
Given that the company has $180 million in cash and $375 in credit facilities, it looks like a repeat of 2013 would pretty much wipe it out.
Right now the company is closing over 1,000 stores, or 20% of its locations, in an effort to right the ship.
Again, I say: Just die already.
I don’t have anything personal against RadioShack. In fact, I have fond, childhood memories of the store (which I wrote about in Boom & Bust in October 2012).
It seemingly had everything you could need in terms of electronics, batteries, and antennas. But over the years, it became a small version of big-box electronic stores, without the variety of brand names.
Now, I just don’t know what it is.
RadioShack exists in the middle of the creative-destruction cycle that Harry and I have talked about for so long. That’s why we highlighted the store as a dying American icon last summer. It’s just taking a while for the actual death to occur.
The only thing that saved the company in 2013 was a restructuring of its debt and a renewed credit facility. But these maneuvers didn’t cure the disease, they simply prolonged the ending.
The good news for RadioShack is that many a retailer has both died and been resurrected, pretty much simultaneously. The company still has 4,000 locations spread around the nation, and exceptional brand recognition.
Now if only it could come up with a product to sell that people actually want to buy…
P.S. That October 2012 Boom & Bust issue I referred to earlier is in our archive on our website. This will tell you how to gain access.
|Follow me on Twitter @RJHSDent|
Ahead of the Curve with Adam O’Dell
Last year, as the holiday shopping season was in full swing, I wrote about the practice of show-rooming in a piece titled:“We Killed It.”