Radio Shack Bankrupcy

[Evil Lurker]

There are very very few individuals in the USA nowadays that have any sort of working knowledge of anything electrical past "plug it up, and if it works, cool, if not throw it away and buy something new". Some are so clueless they probably should be refraining from plugging in cords to wall outlets. Because of this general lack of knowledge amongst the populace coupled with the transition of through hole to SMD assembly and Radio Shack's failure to keep up with current technology it's customer base of electronics hobbyists has dwindled over the years. To make up for it Radio Shack attempted to transition its business model over to peddling consumer devices and cell phone contracts. Unfortunately for them competition in that marketplace is quite stiff and Radio Shack found itself going into a death spiral.  Radio Shack's inventory could best be described as a wide selection of cable repair fittings, a dismal selection of extremely jellybean through hole passive and semiconductor components, and a bunch of consumer devices all at ridiculously overly inflated prices.

It is just a matter of time before they close their doors permanently and auction off all their inventory.

[cosmicray]

Are the US Radio Shack stores all corporate owned/operated, franchised, or some combination ?

[dannyf]

There are very very few individuals in the USA nowadays that have any sort of working knowledge of anything electrical past "plug it up, and if it works, cool, if not throw it away and buy something new".

Depending on your definition of "few". I would conservatively put that number to well over 1 million, and likely in the multi-million level.

The issue is desire: not many of those millions who can are willing to work on electronics, especially as a hobby.

[pickle9000]

There are very very few individuals in the USA nowadays that have any sort of working knowledge of anything electrical past "plug it up, and if it works, cool, if not throw it away and buy something new".

Depending on your definition of "few". I would conservatively put that number to well over 1 million, and likely in the multi-million level.

The issue is desire: not many of those millions who can are willing to work on electronics, especially as a hobby.

Far more interest now than 20 years ago. Not that the hobby would die but interest was minimal.

[mtdoc]

Are the US Radio Shack stores all corporate owned/operated, franchised, or some combination ?

It's a combination.  The one in my town in corporate owned. The next closest (15 miles) in the next town over is a franchise - they have some significant differences in what they stock.

[cosmicray]

Are the US Radio Shack stores all corporate owned/operated, franchised, or some combination ?

It's a combination.  The one in my town in corporate owned. The next closest (15 miles) in the next town over is a franchise - they have some significant differences in what they stock.

If this does go to a bankruptcy, then it remains to be seen it will be Chapter 11 (reorganization) or Chapter 7 (liquidation). The latter would likely take the franchisees down with it.

[Tandy]

I would be very surprised that

1) there are sufficient US customers who long for Radioshack parts; and
2) anyone in the UK can rely on that as a meaningful part of its business.

Indeed the plan is not so much for US customers looking for RadioShack parts, although they are welcome the shipping costs and time would make it impractical. Although having said that the actual prices for the components are a fraction of the prices that RadioShack charge. The main area of business is in the UK and Europe, surprisingly there have been quite a few people pleased that they could now order items again that they used to use from Tandy. Clearly this small number of former Tandy customers alone is not enough to sustain a business, that is why we are producing custom kits and acting as a European distributor for Adafruit.

By mentioning people from the US coming to us for help, I was referring more to things like someone who had a realistic mixing desk that we helped them identify a faulty zener diode so they could repair it. Not really something that will make us any money, just trying to be helpful.

[Tandy]

If this does go to a bankruptcy, then it remains to be seen it will be Chapter 11 (reorganization) or Chapter 7 (liquidation). The latter would likely take the franchisees down with it.

At the moment it is looking like RadioShack are putting together a plan to file for Chapter 11. The main reason being that they wanted to close 1100 stores but were prevented from doing so by one of their lenders. There is a suggestion that some of the store leases will be sold to Sprint and because the chapter 11 filing would protect them from their creditors they would be able to close more stores. I believe the plan is to reduce the number of stores to 2000.

[aaronwhite30]

The only thing I think I will truly NOT miss, is the immediate leech attachment of "Can I help you" when entering RS. JEEZ! Sometimes I feel like saying "I seriously doubt you can help me" to some of these teen age twits. Dude! I wouldn't be entering your store if I didn't know what I was after. Usually it is online shopping for parts but in a pinch, I will visit RS after researching parts online.

[Tandy]

Corporate management are to blame, having learnt these tactics from their business school.

Instead of training staff to identify when someone looks like they may need assistance and selectively offering assistance they insist on a standard question that must be asked to all customers even if they are clearly marching straight to the shelf to pick up the item they want.

The poor staff are on minimum wage and 'incentivised' by offering commission and SPIFFs paid, either by a manufacturer or employer, directly to a salesperson for selling a specific product.

Being paid minimum wage and being told exactly how you must do everything is not exactly the best recipe for getting staff that know their stuff.

[dannyf]

At the moment it is looking like RadioShack are putting together a plan to file for Chapter 11.

That's simply the rule of the retail business: you want to go through the holiday seasons so you liquidate / monetize as much out of your inventory as you can. The rescue by the bondholders before the holiday is meant exactly for that.

[jlmoon]

the immediate leech attachment of "Can I help you" when entering RS. JEEZ!

More like "I work for commission and don't know what I'm selling"

Ease up on the poor RS employee. They weren't paid enough to deserve a shitcanning. Besides the management would have told the staff to do that. I worked briefly in Dick Smith Electronics in a former life, and we were told to say "How may I help you?" never "How can I help you?" or just "Can I help you?" There were a lot of customers who did not frequent RS (or DSE) often and would find themselves out of their comfort zone. They would not wish to wander the store looking for service.

I agree with Wilfred on this one.. Ease up!!!  I had my day working at Radio Shack as well.. until you work for them you have no clue what a person is required to do while under their employment.  I was taught early not to use the term "How can or may I help you"  that could be considered offending to some.. as if they were helpless.  Until you have worked the electronic retail scene for a while, I would withhold judgement on those underpaid individuals just trying to survive.  Give them a break!!! 

[Howardlong]

Corporate management are to blame, having learnt these tactics from their business school.

Instead of training staff to identify when someone looks like they may need assistance and selectively offering assistance they insist on a standard question that must be asked to all customers even if they are clearly marching straight to the shelf to pick up the item they want.

The poor staff are on minimum wage and 'incentivised' by offering commission and SPIFFs paid, either by a manufacturer or employer, directly to a salesperson for selling a specific product.

Being paid minimum wage and being told exactly how you must do everything is not exactly the best recipe for getting staff that know their stuff.

Indeed, that is the recipe for a race to the bottom.

Over here in the UK we have Maplin which does actually still sell resistors, in every store, and here in London they have some stores in extremely high rent areas, apparently making a killing on AC adapter plugs to the tourists whenever I go in there. The difference here is that if there's a guy on the door is most likely trying to stop the scallies wondering in and walking off with the stock. Occasionally, and it is a pleasurable exception, there will be someone there who knows what they're talking about, but all too often it'll be a gum chewing disinterested "computer says no" type.

However for the ultimate in UK crap shopping experiences, we have Dixons aka Currys aka PC World, the UK's rubbish attempt at BestBuy, where whenever you want to find an assistant they're nowhere to be found. When by sheer fluke you can find one, you ask them about an item, and they just read from the same effing description card you've already read. It was nothing short of gob-smacked disbelief on this side of the pond Apple took on Dixon's ex-CEO John Browett as their retail guru three years ago. What was not surprising was that he lasted less than six months.

I really do wonder if any of the upper echelons ever actually go into their own stores for a shopping experience rather than as a parachute in management finger pointing exercise. They might learn something if they did.

[linux-works]

I used to religiously go there and get my free batteries each month.

the infamous 'battery club card'.  oh yes!

CSB: I once came across a guy's resume (CV) who listed all his clubs and honor societies at the end.  included there, most probably for fun, was 'member: radio shack battery club'.  I often thought of adding that to my resume, just to see if the interviewer read it thru to the end; if they 'got' the joke or if they just stared at that line, ignored it and moved on

[GreyWoolfe]

As an ex RS employee from back in the early 90's, the thing I hated the most was the battery club.  We would be inundated at the beginning of the month with all the senior citizens who had 30-40 cards each.  I took almost child-like delight in taking all the cards they handed me, throwing all but 1 away and handing 1 marked card and battery back.  I would always hear, "But I am getting them for my friends also!"  My response-"Then your friends must come in with their card for their battery, have a nice day."  I was helping out in a mall store for a week and one day the mall had a power outage-the entire mall.  We got everyone out of the store and closed the gate but it was a fight to get rid of the battery club members as it was the first of the month.  They were complaining about not getting the batteries when the store was so dark, we would have had trouble find the damn things anyway.  We did manage to scare some up and get some flashlights working and all those people waited outside the gate in the dark until power came back up and we opened the store back up.  Any of the managers I had never gave me grief about throwing the cards away as they were just as annoyed at the serial card carriers.

the immediate leech attachment of "Can I help you" when entering RS. JEEZ!

More like "I work for commission and don't know what I'm selling"

Ease up on the poor RS employee. They weren't paid enough to deserve a shitcanning. Besides the management would have told the staff to do that. I worked briefly in Dick Smith Electronics in a former life, and we were told to say "How may I help you?" never "How can I help you?" or just "Can I help you?" There were a lot of customers who did not frequent RS (or DSE) often and would find themselves out of their comfort zone. They would not wish to wander the store looking for service.

I agree with Wilfred on this one.. Ease up!!!  I had my day working at Radio Shack as well.. until you work for them you have no clue what a person is required to do while under their employment.  I was taught early not to use the term "How can or may I help you"  that could be considered offending to some.. as if they were helpless.  Until you have worked the electronic retail scene for a while, I would withhold judgement on those underpaid individuals just trying to survive.  Give them a break!!! 

I 2nd that.  As one of those underpaid employees dealing with looky-loos, people returning electronics in 3 or 4 weeks, saying the product didn't work for them when you know that they were just renting it while on vacation and losing the commission and making sure fellow employees didn't stab you in the back if you weren't there and a big ticket customer came in to buy and took your sale and commission, it was with great relief that after a long while, I was able to find a better job that paid more and had less stress.  By the way, we did have to say "Welcome to Radio Shack, how may I help you."

[tom66]

I don't understand how a company like RS can restructure and continue. Why would a bank continue to pump money into them. What can they do to innovate and move on? Even if they axe thousands of stores anyone could look at their year-on-year sales and see the business niche they once occupied is rapidly shrinking and if it's not already nonviable then it can't have long left, a couple years at best. Maybe a case of wanting to get as much back as possible but if it were me I would have rolled in the debt collectors by now.

[aaronwhite30]

Corporate management are to blame, having learnt these tactics from their business school.

Instead of training staff to identify when someone looks like they may need assistance and selectively offering assistance they insist on a standard question that must be asked to all customers even if they are clearly marching straight to the shelf to pick up the item they want.

The poor staff are on minimum wage and 'incentivised' by offering commission and SPIFFs paid, either by a manufacturer or employer, directly to a salesperson for selling a specific product.

Being paid minimum wage and being told exactly how you must do everything is not exactly the best recipe for getting staff that know their stuff.

Yeah, I sometimes forget that most of employees are just there for a job and are usually not very knowledgeable or electronic enthusiasts.

[xrunner]

I got a couple of bags full of stuff the other day at one of the "Closeout" stores. 50% - 70% off. Sad fact was, even at 50% off, a lot of the stuff was still too expensive. 

[linux-works]

As an ex RS employee from back in the early 90's, the thing I hated the most was the battery club.  We would be inundated at the beginning of the month with all the senior citizens who had 30-40 cards each.  I took almost child-like delight in taking all the cards they handed me, throwing all but 1 away and handing 1 marked card and battery back.

you're just brimming with customer service, aren't you?

if that happened to me, I'd put a series of calls into corp and you'd be out of a job in no time.

those batteries cost YOU nothing.  and you represented the company in a bad way.  its amazing you held a job there more than a single day, with that kind of crap attitude.

look, its a 'loss leader' and its not your call to piss off customers.

I hope you left the service industry.  you don't belong in it.

[JuiceKing]

While the exact date is unknown it is almost certain that RadioShack will enter bankruptcy in the next few weeks...As a former employee of Tandy RadioShack and now CEO of Tandy Corporation (UK) I have been closely following the company and my somewhat long analysis of the company is below...

Thank you for this posting. It must be painful to see this through.

Radio Shack was enormously influential on me, mostly because my local store manager was kind enough to let me spend Saturday afternoons at the store, exploring the then-new, and endlessly fascinating TRS-80. It was a unique opportunity and incredible gift at the time! So much in my life was set in motion with that generosity. The world has changed, but that will stay with me forever.

[dannyf]

Radio Shack was enormously influential on me...

I share that sentiment. I would miss them if they go away.

Unfortunately, every great company inevitably dies. Some sooner than others.

[linux-works]

Radio Shack was enormously influential on me, mostly because my local store manager was kind enough to let me spend Saturday afternoons at the store, exploring the then-new, and endlessly fascinating TRS-80.

trs-80 was my first computer, got one just about when they came out in 78 or 79.  I was just finishing high school at the time, so it was perfect timing for me.  convinced me to go the comp-sci route instead of EE.  I was able to get thru the comp-sci stuff at college so much faster and easier than those in my class who did NOT have a home computer or did not grow up with one.

today, though, that 'advantage' is mostly lost since pretty much everyone has a computer at home, now.  but in the late 70's, that was most certainly not the case and ratshack (sorry) was very key in getting many of us setup in the field at a very early age.

[iampoor]

The only thing I think I will truly NOT miss, is the immediate leech attachment of "Can I help you" when entering RS. JEEZ! Sometimes I feel like saying "I seriously doubt you can help me" to some of these teen age twits.

Or you could just say "No thanks"...... 

[xrunner]

The only thing I think I will truly NOT miss, is the immediate leech attachment of "Can I help you" when entering RS. JEEZ! Sometimes I feel like saying "I seriously doubt you can help me" to some of these teen age twits.

I just say "I'm going to the parts bins ..."

That always makes them go away. 

[GreyWoolfe]

As an ex RS employee from back in the early 90's, the thing I hated the most was the battery club.  We would be inundated at the beginning of the month with all the senior citizens who had 30-40 cards each.  I took almost child-like delight in taking all the cards they handed me, throwing all but 1 away and handing 1 marked card and battery back.

you're just brimming with customer service, aren't you?

if that happened to me, I'd put a series of calls into corp and you'd be out of a job in no time.

those batteries cost YOU nothing.  and you represented the company in a bad way.  its amazing you held a job there more than a single day, with that kind of crap attitude.

look, its a 'loss leader' and its not your call to piss off customers.

I hope you left the service industry.  you don't belong in it.

Obviously, you never looked at the back of one of those cards.  On the back, if I remember, it said 1 battery per card per month.  People were only to have 1 card.  Complaints probably wouldn't have gotten farther than being told not to take their precious cards from them.  These people were scamming the system for crap batteries that they would never use, just store in the refrigerator until dead.  These people were not shoppers.  They would storm the store once a month, never to be seen until the next month.  As one of those underpaid people trying to make enough commission to live, myself and my fellow employees were more interested in helping customers who actually had money to spend and would buy real batteries for their purchases.  They would refuse a battery club card as they knew the batteries were crap.

Loss leader?  A loss leader (also leader) is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. With this sales promotion—marketing strategy, a "leader" is used as a related term and can mean any popular article, i.e., one sold at a normal price.
Those things never drove any sales.  It would be foolish to even think that.

Attitude?  I was always very polite and helpful to all customers, even the battery scammers.  I was simply following company policy.  FYI, I have been in the service industry all my working life.  Now, thank God, I no longer deal with the public, I work at the government agency level.  You should take the advice of others who posted here.  If you haven't worked at RS,  you have no real clue what it was like.  You should probably get back up on your high horse and ride off into the sunset.  By the way, I would have been polite and helpful even to you.