RadioShack Still Faces Plenty of Challenges

|
 |  About: RadioShack Corporation (RSH)
by: Davis Freeberg

America’s finest news source, the Onion, took a stab at financial analysis on RadioShack’s (NYSE:RSH) stock and concluded that even the CEO of RadioShack can’t figure out how it's still in business. The article is packed full of gems, but here are a few of my favorite choice quotes from the piece.

  • "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?"
  • 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.
  • It’s like walking into your grandpa’s basement. You always expect to see something cool, but it never delivers.
  • I know one thing. If Sony (NYSE:SNE) and JVC start including gold-tipped cable cords with their products, we’re screwed.
  • Even though the article is a parody, there is still a little bit of truth to it. Last month, Moody’s told investors that RadioShack wasn’t just selling junk inside of the store and despite the company’s recent stock rebound, it still faces plenty of challenges as it completes its restructuring.

    I don’t normally shop at RadioShack, but the last few times I have gone in there, I haven’t been very impressed. Sure it has plenty of gadgets, but it is never the kick ass cutting edge gadgets, it is the cheap plastic gadgets that someone might buy, but wouldn’t really need. Things like wireless doorbells or $80 adapters that recharge your cell phone, even though you can use a $2 USB cord instead.

    What I do use RadioShack for though is scoring accessories that I’ve forgotten about, but need at the very last minute. I may end up paying more for new batteries or an ethernet cord, but at least it has it and it’s usually convenient to find a Radio Shack location.

    I would actually shop at RadioShack more, except every time I go into its store, they try and hard sell me on something I don’t need. Whether it’s its “gold tipped cable” cords or a more expensive version of what I’m really looking for, its sales associates have always been very aggressive with the suggestive sale. This probably helps to keep themselves in business, but as a consumer who typically knows what he wants, it’s a huge turn off when I think about going into one of its stores.