Is RadioShack Going Out Of Business? So, the answer is Yes, RadioShack is going out of business. RadioShack, a major electronics store, filed for Chapter 11 bankruptcy twice. The company acquired several stores that generated revenues from each other, but they generated losses. RadioShack closed its several stores while most electronics stores started selling items online. Electronics sales were also in brick-and-mortar locations, but many stores were closed.
It was believed that RadioShack reported high sales of the cellphones from 2013 to 2014. Of the high sales concentration of the cellphones, the company accounted for more than 50 percent of the total sales, but there were no profit margins. When the company observed this, it tried to shift its focus to the turnaround.
To prevent failures, In 2013, the company decided to take a loan from Salus Capital. But this decision was the biggest mistake and led the company to close its hundreds of physical locations in the same year.
Continue reading to know more about the status of RadioShack. This captivating blog delves into RadioShack and its discontinuation, including, Why Is RadioShack going out of business? Is RadioShack still in business? Who Owned RadioShack? Will RadioShack make a comeback? And several more. If you want answers to all these questions, you must keep reading this blog further!!
Let’s Get Started!!
Why Is RadioShack Going Out Of Business?
Let’s find out what were the reasons why RadioShack went out of business.
product concentration was a issue
Product concentration was one of the major reasons for the discontinuation of RadioShack.
In 2000, RadioShack shifted its focus to selling accessories and cell phones; this proved beneficial. In 2014, the company made around 50 percent of the company’s total sales alone by cellphone sales.
It indicated that cell phone sales proved to be the best step, but it was also a risky step. After some time, things reversed immediately when the iPhone was introduced on the market.
The company shifted its focus toward online retailers to expand its business. To maintain sales and efficacy, they increased costs but consumers substantially reduced payments. Due to this, RadioShack’s profit and sales dropped, and the company filed for Chapter 11 bankruptcy.
too many stores nearby
It was noted that RadioShack acquired around 4,300 stores in North America in 2014. Although there were so many stores located nearby, more than 20 stores were located within a distance of a 25-mile radius near Sacramento, California.
Also, seven stores were noted to be located within five miles of Brooklawn, New Jersey.
Due to high store concentration within proximity to each other, the company generated a massive loss, and no profits were there; the inventory problems became a serious issue for the company.
RadioShack experienced a major reduction in business, and it became expensive to maintain several stores within a small distance in an area.
tough online competition
Online Competition was also a major threat. When RadioShack was initiated, there were only in-built stores under the company name through which they experienced high profit and sales.
So, they expanded their business through online retailers such as Amazon, Instacart, eBay, and many more.
Consumers began to buy electronic items at cheaper rates, and the products were delivered anywhere across the country.
Everything was going on flow. Apart from this, Consumers started to complain about their products, which reduced the shopper numbers, and the company was afraid that they would return or not.
immediate management changes
To maintain the company’s turnover, they decided to change its management. In 9 years, from 2005 to 2014, they replaced its CEO seven times. In 2013, Joseph Magnacca became RadioShack’s CEO to boost the company’s turnaround.
Later, he set up the goal with the team to restore profits with its product revamps, changes in compensation structure, aggressive marketing campaigns, and significant stores by 2015.
When the company’s CEO was replaced with Joseph Magnacca, his plan came into action. Still, something needs to be received because of the high costs, changed management system, and manipulating confusing commission structures.
experiencing cash burn
The company has been experiencing massive sales and earnings since 2012. In 2013, it generated 250 million US dollars from Salus and 585 million US dollars from GE Capital. RadioShack closed more than 200 of its stores per year.
Due to continuous cash burn and holiday season sales, the company accelerated the bankruptcy filing in 2014. They decided to close over a quarter of its physical locations to prevent the cash burn.
When Did RadioShack Make Come Back?
Yes, RadioShack has made come back in 2020, and it is still in business. The company filed for bankruptcy in 2015 and again in 2017, twice between these two years. Later, it was believed that Retail E-commerce Ventures acquired the total assets and marketing materials from RadioShack. REV planned to relaunch this Radio Shack iconic brand through online retailers.
It is noted that radioshack.com still stocks its previous products and supports the existing physical stores.
RadioShack is the seventh acquired company of the REV in two years.
Who Are The Major Competitors Of RadioShack?
According to reports of monthly visits, it was noted that if we check data of April 2023, there are several competitors of radioshack.com, including:
- bestbuy.com with 91.6M visits
- mouser.com with 4.1M visits,
- newegg.com with 14.6M visits
- digikey.com with 4.8M visits
- frys.com with 54.3K visits
- circuitcity.com with 28.2K visits
- etronics.com, no specific data has been shown
- allelectronic.com with 58.9K visits
- jr.com. No data has been shown
- tigerdirect.com with 207.0K visits
How Many RadioShack Are Left In 2023?
RadioShack Corporation initiated and opened 60 company owned and 245 franchised locations in Central America, South America, and the Caribbean.
According to reports, RadioShack was believed to have left 400 stores under the name of Retail E-Commerce Ventures by 2022.
When this company was acquired by Retail E-commerce Ventures LLC, operated by Executive Chairman Tai Lopez and Chief Executive Alex Mehr, which is a Miami-based enterprise, they operate it now, and it is considered a crypto company.
When REV acquired RadioShack and made this company a crypto company, they represented it with a catchphrase, “Think you know crypto? YOU DON’T KNOW, SHACK.”
The Final Words
At the end of this blog, we’ve concluded that RadioShack went out of business twice in 2015 and 2017. But in 2020, REV acquired RadioShack and started operating the company under its name. Now the company has become a crypto company.