Thursday, February 5, 2015

Adieu, Radio Shack

As expected, Radio Shack filed for Chapter 11 Thursday. The brand isn't worth much, but some of the locations are coveted by the 3rd largest cellphone carrier, who plans to operate almost 3/4 of the stores to peddle cellphone service.

The failure of Radio Shack — like so many other firms — is almost anti-climactic. The business model failed years ago, and the firm has been struggling to find any excuse to stay open and throw good money after bad. The company had its time, and that time has passed: like K-Mart, Sears, Borders, Circuit City and (my greatest distress) Mervyn’s.

Radio Shack served several roles: it was the only hobbyist electronics chain and the only electronics store in many small towns and exurbs. As a parts store, it actually played an important role in the 1970s in getting the PC revolution off the ground. And I still remember visiting it for that purpose in high school and college to get some switch or solder or other part to finish a project. There was also a brief period where they had cutting edge computer equipment, notably the TRS-80 Model 100.

Whether or not that would pay the bills today — and certainly not for 2,400 stories — the company has been struggling to find a business model for the past 10-20 years,with an emphasis on cellphones (plus misc. consumer electronics like novelties like toys). They never had very good audio equipment, so anyone who bought stereo stuff there (other than cables) didn't know what they were doing. But they were a cellphone distributor — and a neutral one at that — in thousands of local malls that gave people a predictable place to buy electronics.

Today, you can buy better stereo and computer equipment at Best Buy (at equally inflated prices): yes you have to drive 5-10 miles instead of 1-2 miles, but if it’s a purchase over $100 it’s worth it (and many of the cables can be purchased at the corner drugstore, Target or Wal-Mart).

The death of Radio Shack won’t even be noticed by Southern California hobbyists. The last two times I went to my local store, I was struck by how few components (like wire or solderable connectors) were offered compared to earlier this century. Instead, we all go to Fry’s which offers components, tools, assembled products, recorded content, toys, kitchen appliances, candy and a cafe.

So Radio Shack is like the pro athlete who retires after two years of warming a bench, or the movie star who dies in their 60s when they haven’t had a role for 15 years. Yes, they were important once, but now no one will shed a tear.

The funny thing is, the hobbyist market might survive the onslaught of Amazon — just as Home Depot (or Lowe’s) could do so. When you're in the middle of a project, you need the part now, and you don’t want to wait 2 days for it to be delivered (and unless you’re in NYC or SF, the Amazon warehouse is unlikely to have it in inventory for same-day drone delivery). So this yet another reason for me to support Fry’s at every opportunity.

So my condolences to Radio Shack’s shareholders and employees. Forgive me if I don’t have time to attend the wake. And if Radio Shack comes back from the dead (as some accounts imply), there’s nothing in their current (or rumored future) formula that’s going to bring me back.