Tuesday, January 13, 2009
My wife asked this exact same question just the other day, "How does RadioShack stay in business?"
I've long wondered the same thing, though, with me, the question is usually dismissed rather quickly since there is a special place in my heart for these stores going all the way back to the early-80s when, as an Electrical Engineering student, many purchases were made there for lab projects (e.g., octal buffers, dual flip-flops, breadboards, wire strippers, and tons of wire).
Others say that RadioShack is just a giant money laundering business like the sanitation company that Tony Soprano used to run in New Jersey prior to the HBO hit ending its long run a couple years ago.
The folks at The Onion have now added to the intrigue with this report:
Even CEO Can't Figure Out How RadioShack Still In BusinessThere's more at The Onion - funny.
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.
"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."
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.