The Bankruptcy of RadioShack

By: Joe Wathen

RadioShack, the once famous electronics store has had some financial problems as of late. By financial problems, I mean the store hasn’t turned a profit since 2011. But through financial advisors and management options, they hope to rebound.

RadioShack has been in operation for 94 years. Its rise to power is attributed to the mass adoption of the radio and other electronics. It started selling mobile phones in 1984 as well as Walkman’s, CD players, and beepers. And in 1962 the company was acquired by Tandy Corporation who was looking to expand and diversify from leather-based products. In the year 2000 their ticker symbol was changed to RSH. But as with all great legacy’s, it was only a matter time before technology finally caught up to them and made their technology obsolete. And just like their former competition Circuit City who folded in 2009, RadioShack might end up doing the same thing.

In hopes of rebounding from these terrible times, they turned to a Mr. Magnacca. Mr. Magnacca is the former CEO of Duane Reade, which he helped rebuild before it was sold to Walgreens. But the financial troubles proved too much for Mr. Magnacca. But they do have alternate solutions. Solutions such as legal advisor Jones Day, investment bank Lazard Freres, and financial advisors The MAEVA Group and FTI.

Personally, if I was the management of RadioShack I would have gone out of business on my own terms, instead of being forced out of business by the growing popularity of newer age technology.

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9 thoughts on “The Bankruptcy of RadioShack

  1. Kyle Jacobs March 26, 2015 / 10:06 pm

    Joe, you make a great point for RadioShack’s dignity. I remember when RadioShack was the “go-to-place” for everything electronic, it seems they go too comfortable with their strategy and put everything in cruise control. Soon enough competition and the tech industry flourished I think catching RadioShack by surprise. I’m surprised to see that they still have stores open, I know many of the stores that use to be close to me have dispersed and now I go to Best Buy if I need something.

    As far as declaring bankruptcy vs. strictly going out of business I wonder what their losses would be if they shut down completely, what would happen to all their inventory. Declaring bankruptcy I guess allows them to sell off their inventory and minimize their losses, but I wouldn’t have expected it from them. All the products that the company was founded on a fast changing technologies, cell phones, CD players, sound systems. I never thought to buy a phone from them and I don’t think I ever would. All the other products are obsolete to the new age technology, ultimately my opinion RadioShack was that they failed to recognize the speed of the changes in the tech industry.

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  2. Kendra Van Pelt March 29, 2015 / 8:59 pm

    Radio Shack is a great example of the quickly changing times. It was a company that operated fairly successfully for the last 94; however, within the past decade or so, it seems to have hit a wall. As technology is changing, there is really no longer a need for a store like Radio Shack. Consumers will likely go to their phone provider’s store or will go to a large-everything market, such as Target or Wal-Mart. Or, the consumer will head to the internet. A specific, electronic-only store has lost the consumers’ need to go there – those consumers can instead go to Target; not only buy whatever they were going to purchase at Radio Shack, but also get groceries or clothing. Target is a one-stop shop, whereas Radio Shack only offers so much of one product. Additionally, Radio Shack offers no products to set themselves apart from other companies in the market place. There is no longer anything drawing the consumer to Radio Shack. The times have changed and Radio Shack has found it does not have a place within this new era.

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  3. Cody J. Russell April 1, 2015 / 5:14 pm

    I’m having small flashbacks of going to radio shack and circuit city with my dad. Anything and everything on this earth that had something to do with electronics was in stock and if it wasn’t, they’d have it within a day or 2. In all honesty, I thought the system of electronic stores were fool proof and would always be a big business. Then came stores like Costco, Walmart, and a few others that began to have it all in one store for the lowest prices. Why go to one place for food, one place for utilities and another for electronics, right? When it’s all in the same place, it is made to be so much easier for consumers to make choices based on not only rice, but convenience. By making these items more convenient, it pushed Radio Shack out. There are still a few stores here and there, but It would take some crazy marketing and given the circumstances, I feel they had their run. Don’t get me wrong they are still a go to store for many people who know exactly what they are doing, but with today’s world being so convenient, I don’t see any ways these electronic stores can build back to what they used to be. Do I want them to? Hell yeah! But taking a realistic stance, it is beyond difficult to be in favor for these stores to make such a big comeback.

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  4. Brandon Gobbi April 20, 2015 / 10:37 pm

    What I like about what Radio Shack did was that they had the will to keep on fighting. You mentioned that they still hope to rebound, but I know that the Radio Shack in my town which just closed a month or so ago was selling products for like $2. Which doesn’t make much scenes if they are still trying to make money. I’m not too sure how Radio Shack is going to make a turn around if other stores that are closing are selling pretty expensive products for just a couple of bucks.

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  5. Joe Greco April 27, 2015 / 8:06 pm

    Radio Shack’s “never quit” mentality is quite fascinating and something I admire very much, however I do not think it’ll make a comeback. The reason why I feel this way is because very rare do you see an out-dated company such as radio shack resurrect and make a comeback. Take Blockbuster for example, as things such as On-demand, TIVO, Netflix, and many other ways of renting movies came about they were forced to bankruptcy also

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  6. Patrick Barrett April 28, 2015 / 1:50 am

    I agree very much that radio shack should have folded on their own terms. Radio Shack should have just accepted that the inevitable was going to come sooner than later. Not only for a dignity sense but for a financial sense. If they had seen this coming ear lie enough they could have had the ability to sell for a very acceptable price. With tech getting to the advanced place it has come to people want to buy things strait from the source than go through a middle company. Radio shacks fate was visible and inevitable from a long way off and if the play was made earlier on the finical backlash could have been severely reduced

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  7. Patrick Lynch April 28, 2015 / 5:35 am

    Yea the reason why they are bankrupt is because they haven’t done any great ad campaigns and they don’t market whatsoever. I don’t remember the last Radioshack commercial or ad. Like when I walk into their store, it is completely dead and only one person is working there. All I see are electronics on a wall, and I’ve noticed everything is very expensive. I am shocked of how expensive their products were and how desperate they are. They don’t even have music playing in their store, so it is a dull experience when you walk in. I think they should have done some campaigns to show a great experience in Radioshack, and definitely do something with the dumb experience in the store. They are also failing because they are selling products that many other companies make and are selling it for less than Radioshack is selling it for. They should have gone out of business right when the Iphone came out, they would have saved their time and money.

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  8. Blake Boudreau April 28, 2015 / 3:27 pm

    Radio Shack seems to me like a 1980’s electronic store that hasn’t had any updates. It doesn’t surprise be that radio shack went bankrupt, because they don’t have any ad campaigns or marketing strategies to my knowledge. Radio Shack, is a very dull and boring store, I can recalling walking in and just seeing one guy in the center of the store greeting you and just electronics on the wall. They didn’t have anything exciting in the store nor did they have any music playing. Radio should of realized that they weren’t going to make it and they should of sold out before hand. Sometimes have a never quit attitude in business can hurt you in the long run.

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  9. Charlie O'Connor May 7, 2015 / 5:23 am

    You guys don’t remember the Radio Shack Super Bowl commercial where the two employees are alone in the store when the phone rings. One answers and when he hangs up, the other asks who it was and the one who answers say “it was the 80’s, they want there store back”. Then all the typical 80’s people came running into the store. Essentially they were saying, we get it, we’re out dated, come check out the new Radio Shack. They could be strategically closing down multiple stores as part of a revenue strategy.

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