Even CEO Can't Figure Out How RadioShack Still In Business

[89911]

FORT WORTH, TX—Despite having been on the job for nine months, RadioShack CEO Julian Day said Monday that he still has "no idea" how the home electronics store manages to stay open.


CEO Julian Day
"There must be some sort of business model that enables this company to make money, but I'll be damned if I know what it is," Day said. "You wouldn't think that people still buy enough strobe lights and extension cords to support an entire nationwide chain, but I guess they must, or I wouldn't have this desk to sit behind all day."

The retail outlet boasts more than 6,000 locations in the United States, and is known best for its wall-sized displays of obscure-looking analog electronics components and its notoriously desperate, high-pressure sales staff. Nevertheless, it ranks as a Fortune 500 company, with gross revenues of over $4.5 billion and fiscal quarter earnings averaging tens of millions of dollars.

"Have you even been inside of a RadioShack recently?" Day asked. "Just walking into the place makes you feel vaguely depressed and alienated. Maybe our customers are at the mall anyway and don't feel like driving to Best Buy? I suppose that's possible, but still, it's just...weird."

Enlarge Image
A RadioShack store that somehow manages to bring in enough paying customers to turn a profit.
After taking over as CEO, Day ordered a comprehensive, top-down review of RadioShack's administrative operations, inventory and purchasing, suppliers, demographics, and marketing strategies. He has also diligently pored over weekly budget reports, met with investors, taken numerous conference calls with regional managers about "circulars or flyers or something," and even spent hours playing with the company's "baffling" 200-In-One electronics kit. Yet so far none of these things have helped Day understand the moribund company's apparent allure.

"Even the name 'RadioShack'—can you imagine two less appealing words placed next to one another?" Day said. "What is that, some kind of World War II terminology? Are ham radio operators still around, even? Aren't we in the digital age?"

"Well, our customers are out there somewhere, and thank God they are," Day added.

One of Day's theories about RadioShack's continued solvency involves wedding DJs, emergency cord replacement, and off-brand wireless telephones. Another theory entails countless RadioShack gift cards that sit unredeemed in their recipients' wallets. Day has even conjectured that the store is "still coasting on" an enormous fortune made from remote-control toy cars in the mid-1970s.


Day admitted, however, that none of these theories seems particularly plausible.

"I once went into a RadioShack location incognito in order to gauge customer service," Day said. "It was about as inviting as a visit to the DMV. For the life of me, I couldn't see anything I wanted to buy. Finally, I figured I'd pick up some Enercell AA batteries, though truthfully they're not appreciably cheaper than the name brands."

"I know one thing," Day continued. "If Sony and JVC start including gold-tipped cable cords with their products, we're screwed."

In the cover letter to his December 2006 report to investors, "Radio Shack: Still Here In The 21st Century," Day wrote that he had no reason to believe that the coming year would not be every bit as good as years past, provided that people kept on doing things much the same way they always had.

Despite this cheerful boosterism, Day admitted that nothing has changed during his tenure and he doesn't exactly know what he can do to improve the chain.

"I'd like to capitalize on the store's strong points, but I honestly don't know what they are," Day said. "Every location is full of bizarre adapters, random chargers, and old boom boxes, and some sales guy is constantly hovering over you. It's like walking into your grandpa's basement. You always expect to see something cool, but it never delivers."

Added Day: "I may never know the answer. No matter how many times I punch the sales figures into this crappy Tandy desk calculator, it just doesn't add up."

[slakjaw]

I haven't been to a radio shack in years!

[masraum]

theonion is hilarious

[widebody911]

My theory is that Radio Shack is a money-laundering front for the Mob.

[BGCarrera32]

America's longest running garage sale...Radio Shack.

[TerryH]

I will pay a little more at RS to avoid the crowds of Best Buy or Circuit City. They usually carry that odd-ball item not seen in the bigger stores. RS is convenient, a quick trip for that cable or adapter or resistor or other electronic doo-dad. About ten years ago, there were 3 RS stores within 5 miles of me. They are thinning the herd finally.

That article looks like a spoof. Do you think it's real or a snopes candidate?

[Big Ed]

I end up in a Radio Shack about once a year, for something that I need and don't want the hassle of going to a big store. Walk in, tell the dude what I'm looking for, he brings me to it, I buy and exit. It's beautiful.

For those of you in the Northeast, it's the electronic equivalent of Aubuchon Hardware. Yeah, you'll pay 30% more than Home Depot. Yeah, the SKUs are limited. But you walk in, the clerk locates the product for you, you pay and are on your way. I hope they can continue to survive.

[kach22i]

Originally Posted by masraum

theonion is hilarious

Bingo!
http://www.theonion.com/content/news/even_ceo_cant_figure_out_how

[Jim Bremner]

If that story is true, I would fire him if I was in the position to.

I've meet people like him, he's a cancer. If the mold works and makes $$$ but it doesn't fit my thoughts then it's bad and must be changed. WTF! findout why you're making $$$$ and imporove the $$$ don't change it, make $$$$

[Laneco]

Radio Shack carries some stuff that I don't picture being able to get anywhere else. When we put the electromotive system in the spyder, I was not able to get it to fire. Richard Clewett correctly diagnosed that the high-torque starter was causing interference with the timing sensor. He told me to put in a 1/4 watt 1000 ohm resistor in-line.

Radio Shack carried them. Set me back less than 25 cents.

angela

[Gogar]

Remember "Tech America"? The Big Box version of Radio Shack?

Man, I loved that store. Seriously.

[lendaddy]

It is responses to threads like this remind me that there's really no excuse for not making money in America

[jyl]

Convenience, service, and actually their growth, margins and balance sheet seem not-too-bad. I hope RSH sticks around. I buy something there maybe 3X year.

[Porsche-O-Phile]

I was wondering if that was the Onion...

Good stuff. And all true.

[Danimal16]

The RS here in my town is very helpful. There are a couple of young kids in there that are really sharp and VERY helpful. I got rid of cable and these two kids got me fixed up with a couple of new OTA DTV antenna and without them I would have been my regular electronics challenged self. It has not been the case at other RS's but these kids make if very worth while.

[legion]

I like RS. It's the only place that I can go to get electronic/electrical parts to fix things when they break.

[ruf-porsche]

Originally Posted by legion

I like RS. It's the only place that I can go to get electronic/electrical parts to fix things when they break.

Most people just toss it away instead of repairing it.

[the]

Originally Posted by widebody911

My theory is that Radio Shack is a money-laundering front for the Mob.

I think RS is into the dark world of illicit zip code laundering.

[K. Roman]

Most of the time you have to if it's a new electronic product. Things are built not to be replaced. Lot's of nanotechnology.

[Porsche-O-Phile]

Agreed - it's rare to find something these days where you can actually pop it open and identify/replace individual capacitors, resistors, etc. Usually it's all some sort of proprietary i/c circuitry that's made in China or India somewhere, completely beyond the comprehension of mere mortals here in America that speak a different language and have a different (western) method of thinking.