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A Looming Sad Farewell to RadioShack

Several generations of home electronics hobbyists, ham radio enthusiasts and computer nerds spent their growth-spurt years haunting their local RadioShack stores. They can't be happy about the company's long slide toward irrelevance and its looming disappearance as a feature of the retail landscape. The chain joined the quixotic rush by American retailers to open on Thanksgiving Day, but was one of the very few outside the grocery business to be open as early as 8 a.m. A surer sign of management desperation is hard to conceive--or of management cluelessness, for that matter. The Fort Worth firm's CEO, Joe Magnacca, characterized the policy as an effort to "capture the opportunity in the marketplace," but it's hard to figure where the clamor was in the wee hours of Thanksgiving Day for RadioShack's inventory of electronic adapters, batteries and other cheap gewgaws. A few cooks preparing family dinners might have had a burning last-minute need for a spare meat thermometer, but those could only be ordered from RadioShack online, so dropping in at any of its 5,200 local stores that were open (including three of the seven within five miles of my home) wouldn't have done them any good. Harbingers of RadioShack's imminent demise are everywhere. Its employees feel abused. The company has been trying to restructure its finances for months to pursue what Magnacca calls an "operational turnaround." But its latest financial statements have been nothing short of horrific. In September, the firm announced its 10th consecutive money-losing quarter; its cash on hand had dwindled to $30.5 million from $440 million a year earlier. (We asked RadioShack for a comment on these and other issues, but haven't heard back.) At that time, the firm disclosed that "we may not have enough cash and working capital to fund our operations beyond the very near term, which raises substantial doubt about our ability to continue as a going concern" and mentioned the possibility of bankruptcy. Since then, its largest shareholder, the hedge fund Standard General, has given it a little more financial breathing room to show financial progress, but its forebearance could run out early next year. As I write, the stock is trading at 80 cents a share. More via LA Times.

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