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Radio Shack – Only a Couple of Bucks to Go

Wednesday July 25, 2012

Radio Shack was the worst performing stock today. RSH tumbled to 2.60. This would be a good company to look at, along with Kodak EK, about a thirty year decline. 

RSH used to sell stereo gear, a staple of college life. I grant that music has moved to the digital format but I don't think there is a single amp or est of speakers in their store now. Making a phone store out of a Shack was a mistake, ATT, Verizone already have those. 

As the analyst says there is no unique go to feature and Best Buy has more and better gear. 

Circuit City and many other electronic retailers have folded, and with amazon on line and gas at 3.50, the competition gets fierce. 

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12 responses to “Radio Shack – Only a Couple of Bucks to Go”

  1. Joe Avatar
    Joe

    I think it’s interesting how fast the market responded to Radio Shack’s announcement to suspend its dividend for the first time in 25 years. With the capital gains tax rate currently applied towards dividends, there must be a growing pressure from income and value investors to maintain a dividend. Also, I wonder what significance Fitch’s recent downgrade of the company had in this instance.

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  2. Luis Martinez Avatar
    Luis Martinez

    Within the last year, I believe I’ve stopped at a Radio Shack once; and when I went in, I really didn’t know what their expertise was. The store had phones and some electronics, but the selection was so small and the prices were (if I remember correctly) exhorbitant. I don’t think they’ll be around much longer. They have no real identity (especially since their name implies radios)…

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  3. Louis Avatar
    Louis

    I actually used to work at radio shack just as it was staring to change into the company it is today. After I graduated High School in 2002 I started attending a city college and working at radio shack. I left the store to join the Army in 2004, but I could all ready see the end was near when I left. When I arrived there we were just starting to change the way we did business. Radio Shack was starting to become a much more sales oriented company. It was no longer going to about the transistors and capacitors; it was now all about cell phone contracts and satellite subscriptions. We did in fact get rid of all speakers by about the end of 2003 except for a few home theaters in a box and a few wireless or outdoor ones. Radio Shack really did change and I was there as it happened. As a matter of fact the store I worked at no longer exists today. They still carry batteries and a few of the more common electronic components, but the goal when I was there was to sell cell phones and subscriptions. I would receive $15 for every phone sold and $25 for every satellite. Also I received an extra $2, $3, or $5 for every additional accessory sold with the phone. The manager kept a sales chart in the back. Today I feel like it’s even worse, I know when I worked there I was in the back taking online training courses for months so that I could answer any technical question that was thrown at me, you know that whole “you’ve got questions we got answers” thing, back then it was for real; today not so much. I feel the reason they are failing is because they have lost touch with their corporate identity.

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  4. Dennis Elam Avatar
    Dennis Elam

    Louis
    I agree, RS had a niche with amps and speakers and tried to compete with verizon and ATT, not going to happen. Like JC Penny it is amazing how fast you can destroy a known brand.

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    Ray Yagubyan

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