RadioShack
RadioShack is an American electronics retailer that was established in 1921 as a mail-order business focused on amateur radio. Its parent company was purchased by Tandy Corporation in 1962; Tandy ended mail order, shifted to retail by opening small stores staffed by people who knew electronics, greatly reduced the number of items carried, and replaced name-brand products with private-label items from lower-cost manufacturers. These moves were successful and the brand grew.
In the late 1970s, the company branched into personal computers, and in the 1990s, it began to focus on wireless phones and de-emphasize the hobbyist market. RadioShack reached its peak in 1999, when Tandy operated over 8,000 stores in the United States, Mexico, and Canada, and under the Tandy name in The Netherlands, Belgium, Germany, France, the United Kingdom, and Australia. However, its sales strategy increasingly competed with big-box stores and dedicated wireless phone retailers, and it fell into decline.
In February 2015, after years of management crises, poor worker relations, diminished revenue, and 11 consecutive quarterly losses, RadioShack was delisted from the New York Stock Exchange and subsequently filed for Chapter 11 bankruptcy. In May 2015, the company's assets were purchased by General Wireless, a subsidiary of Standard General, for US$26.2 million. In March 2017, General Wireless and subsidiaries also filed for bankruptcy and RadioShack announced plans to shift its business primarily online. RadioShack was acquired by Retail Ecommerce Venture and RadioShack operated primarily as an e-commerce website with a network of independently owned and franchised RadioShack stores. In May 2023, the El Salvador–based franchisee Unicomer Group acquired control of the worldwide RadioShack business.
History
The first 40 years
The company was started as Radio Shack in 1921 by two brothers, Theodore and Milton Deutschmann, who wanted to provide equipment for the new field of amateur radio. The brothers opened a one-store retail and mail-order operation in the heart of downtown Boston at 46 Brattle Street. They chose the name "Radio Shack", which was the term for a small, wooden structure that housed a ship's radio equipment. The Deutschmanns thought the name was appropriate for a store that would supply the needs of radio officers aboard ships, as well as hams. The idea for the name came from an employee, Bill Halligan, who went on to form the Hallicrafters company. The term was already in use — and is to this day — by hams when referring to the location of their stations.The company issued its first catalog in 1939 as it entered the high-fidelity music market. In 1954, Radio Shack began selling its own private-label products under the brand name Realist, changing the brand name to Realistic after being sued by Stereo Realist.
During the period the chain was based in Boston, it was commonly referred to disparagingly by its customers as "Nagasaki Hardware", as much of the merchandise was sourced from Japan, then perceived as a source of low-quality, inexpensive parts.
In 1959, the store moved its headquarters to 730 Commonwealth Avenue in Boston, with ambitious plans for further expansion. After expanding to nine stores plus an extensive mail-order business, the company fell on hard times in the early 1960s.
Tandy Corporation
Tandy Corporation, a leather goods corporation, was looking for other hobbyist-related businesses into which it could expand. Charles D. Tandy saw the potential of Radio Shack and retail consumer electronics, purchasing the company in 1962 for US$300,000.At the time of the Tandy Radio Shack & Leather 1962 acquisition, the Radio Shack chain was nearly bankrupt.
Tandy's strategy was to appeal to hobbyists. It created small stores that were staffed by people who knew electronics, and sold mainly private brands. Tandy closed Radio Shack's unprofitable mail-order business, ended credit purchases and eliminated many top management positions, keeping the salespeople, merchandisers and advertisers. The number of items carried was cut from 40,000 to 2,500, as Tandy sought to "identify the 20% that represents 80% of the sales" and replace Radio Shack's handful of large stores with many "little holes in the wall", large numbers of rented locations which were easier to close and re-open elsewhere if one location didn't work out. Private-label brands from lower-cost manufacturers displaced name brands to raise Radio Shack profit margins; non-electronic lines from go-carts to musical instruments were abandoned entirely.
Customer data from the former RadioShack mail-order business determined where Tandy would locate new stores. As an incentive for them to work long hours and remain profitable, store managers were required to take an ownership stake in their stores. In markets too small to support a company-owned Radio Shack store, the chain relied on independent dealers who carried the products as a sideline. Charles D. Tandy said "We're not looking for the guy who wants to spend his entire paycheck on a sound system", instead seeking customers "looking to save money by buying cheaper goods and improving them through modifications and accessorizing", making it common among "nerds" and "kids aiming to excel at their science fairs".
Charles D. Tandy, who had guided the firm through a period of growth in the 1960s and 1970s, died of a heart attack at age 60 in November 1978.
In 1982, the breakup of the Bell System encouraged subscribers to own their own telephones instead of renting them from local phone companies; Radio Shack offered twenty models of home phones.
Much of the Radio Shack line was manufactured in the company's own factories. By 1990/1991, Tandy was the world's biggest manufacturer of personal computers; its OEM manufacturing capacity was building hardware for Digital Equipment Corporation, GRiD, Olivetti, AST Computer, Panasonic, and others. The company manufactured everything from store fixtures to computer software to wire and cable, TV antennas, audio and videotape. At one point, Radio Shack was the world's largest electronics chain.
In June 1991, Tandy closed or restructured its 200 Radio Shack Computer Centers, acquired Computer City, and attempted to shift its emphasis away from components and cables, toward mainstream consumer electronics. Tandy sold its computer manufacturing to AST Research in 1993, including the laptop computer Grid Systems Corporation which it had purchased in 1988. It sold the Memorex consumer recording trademarks to a Hong Kong firm, and divested most of its manufacturing divisions. House-brand products, which Radio Shack had long marked up heavily, were replaced with third-party brands already readily available from competitors. This reduced profit margins.
In 1992, Tandy attempted to launch big-box electronics retailer Incredible Universe; most of the seventeen stores never turned a profit. Its six profitable stores were sold to Fry's Electronics in 1996; the others were closed. Other rebranding attempts included the launch or acquisition of chains including McDuff, Video Concepts and the Edge in Electronics; these were larger stores which carried TVs, appliances and other lines.
Tandy closed the McDuff stores and abandoned Incredible Universe in 1996, but continued to add new Radio Shack stores. By 1996, industrial parts suppliers were deploying e-commerce to sell a wide range of components online; it would be another decade before RadioShack would sell parts from its website, with a selection so limited that it was no rival to established industrial vendors with million-item specialised, centralised inventories.
In 1994, the company introduced a service known as "The Repair Shop at Radio Shack", through which it provided inexpensive out-of-warranty repairs for more than 45 different brands of electronic equipment. The company already had over one million parts in its extensive parts warehouses and 128 service centers throughout the US and Canada; it hoped to leverage these to build customer relationships and increase store traffic. Len Roberts, president of the Radio Shack division since 1993, estimated that the new repair business could generate $500 million per year by 1999.
"America's technology store" was abandoned for the "you've got questions, we've got answers" slogan in 1994. In early summer 1995, the company changed its logo; "Radio Shack" was spelled in camel case as "RadioShack". In 1996, RadioShack successfully petitioned the US Federal Communications Commission to allocate frequencies for the Family Radio Service, a short-range walkie-talkie system that proved popular.
Battery of the Month
From the 1960s until the early 1990s, Radio Shack promoted a "battery of the month" club; a free wallet-sized cardboard card offered one free Enercell per month in-store. Like the free vacuum tube testing offered in-store in the early 1970s, this small loss leader drew foot traffic. The cards also served as generic business cards for the salespeople.Allied Radio
In 1970, Tandy Corporation bought Allied Radio Corporation, merging the brands into Allied Radio Shack and closing duplicate locations. After a 1973 federal government review, the company sold off the few remaining Allied retail stores and resumed using the Radio Shack name. Allied Electronics, the firm's industrial component operation, continued as a Tandy division until it was sold to Spartan Manufacturing in 1981.Flavoradio
The longest-running product for Radio Shack was the AM-only Realistic Flavoradio, sold from 1972 to 2000, 28 good years in three designs. This also made the Flavoradio the longest production run in radio history. It was originally released in five colors in the 1972 catalog: vanilla, chocolate, strawberry, avocado, and plum. For 1973, vanilla and chocolate were dropped and replaced by lemon and orange. At some point two-tone models with white backs were offered but never appeared in catalogs; these are extremely rare today.The original design had five transistors. A sixth was added in 1980. The case was redesigned for 1987, making it taller and thinner, and it came in red, blue, and black. The final model, 201a, came in 1996 and was designed around an integrated circuit. They were first made in Korea then Hong Kong and finally the Philippines. The Flavoradio carried the Realistic name until about 1996, when it switched to "Radio Shack", then finally "Optimus". When the Flavoradio was dropped from the catalog in 2001, it was the last AM-only radio on the market.