RadioShack has the look of a company re-arranging deck chairs on a corporate Titanic, trying every possible new trick in order to avoid a demise of the brand that seems to grow more inevitable every day.
The chain’s latest gambits? Crowdsourcing ideas for products that it will have produced and then sell in its stores, as well as expanding a quick fix-it service.
On Tuesday, RadioShack posted a 14 percent drop in same-store quarterly sales and a widening loss of $98 million, blaming its continuing decline on an industry-wide slowdown in US spending on consumer electronics and the evaporation of big subsidies from cell-service companies as well as intensifying competition from wireless carriers’ own retail outlets. The company is closing 200 stores this year, scrambling for cash and credit, slashing expenses and watching its stock tank.
“The entire team is mindful of every dollar we’re spending” as the chain tries to repair the gaping holes in the RadioShack roof, CFO John Feray told investors.
The brand also is scratching for every sales dollar its stores can generate. For one thing, its new partnership with PCH, an Irish company that helps startups manufacture hardware and build out their supply chains, will hopefuly churn out hot new products exclusive to RadioShack. Inventors can submit ideas for review online, of which the retailer then hopes to green-light dozens of the pitches and quickly route the concepts to factories and onto RadioShack’s shelves and online store, according to Bloomberg Businessweek. The partnership, dubbed RadioShack Labs, is similar to an existing one that the retailer has with Quirky, an online hub for inventors that also has a partnership with GE.
“The goal here is to drive differentiation and newness,” RadioShack CEO Joe Magnacca said on a conference call. “We are developing a vast tech capability that is designed to allow us to have a continuous flow of new merchandise shipped directly to our stores.”
The same-day repair service is a different tactic to lure foot traffic back to many of RadioShack’s 4,300 US stores. Its nationwide Fix It Here program for phones and tablets promises the same-day service only in selected markets, but the program is expanding to more than 700 stores by year-end from only 280 now.
“Same-day repairs haven’t been available from a trusted national retail brand—until now,” Magnacca told USA Today. The service already has helped RadioShack draw customers “from a larger radius than our traditional RadioShack customer.”
Will it all be enough? RadioShack hasn’t even been able to shrink the way Magnacca wanted to, recently having to pull back its plans to close at least 1,100 stores right away because some of its lenders challenged the move. Maybe the chain will be more successful shifting into a more expansion-minded mode again.
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