One of the many reports I read on the fall of Radio Shack blamed its demise on the dated company name, but I feel it ran deeper than that. The dated and higher priced merchandise would play a far larger role. With walls covered in land lines, CB Radios, and retro gadgets of technology that could not compete amongst the bargain prices offered by bigger fish like Best Buy and Amazon. So what now? How does the future look post Bankruptcy?
The Future for Radio Shack Locations
Sprint has purchased 2400 of Radio Shack’s store locations, adding to the incredibly vast surplus of cellular stores already in place across America. They will carry “mobile devices across Sprint`s brand portfolio as well as RadioShack products, services and accessories.” A risky investment that can will definitely stand their brand of cellular retail locations to a wider range of customers, but will it be different enough to succeed where Radio Shack did not?
The rest of the store locations will be held up for auction leaving Sprint to battle it out with other potential retailers (so far Brookstone and Amazon) who already have their eyes on these locations. For Amazon this could not have better timing. Amazon has just opened it first brick and mortar store earlier this week in order to add more convenience for their shoppers and up their advantage over Best Buy. With Radio Shack liquidation it’s like a blow out of assets helping them to expand to already established prime locations at only a fraction of the price. These stores should make returns and pick ups more convenient, and the actual product on hand is proposed to be the top 100-200 products already trending on their website.
What Happens to the Stock Holders?
Over the past 12 months the stock worth in Radio Shack had taken a dive of 90% before finally being found in default when they did not present a new business plan to the NYSE in order to explain how they would pull back up to a company worth of $50 million. Investors in these stocks will unfortunately loose any money invested in the stock, and let go of the idea of any future earnings that they may have depended on.
What Happens to the 27,000 employees?
There is a reason that little notice is given when a retailer plans to shut down a store location and that is to maintain an honest and motivated sales team in order to be able to close at its best. With the notice given yesterday of the bankruptcy you can expect a mixed bag of reactions. There will be those diligent employees who will persevere through and there will be employees jumping ship as soon as possible in order to find another source of gainful employment. Some store locations are reported to already be down to only two employees, which could leave some locations to be in some precarious positions while the closing of the stores play out. Considering 2400 locations are being purchased and maintained by Sprint, those who hold out and shine could possibly be looking at a simple change in name on the brand they promote.
As for the rest, Radio Shack could not have found a more advantageous time to release their employees. It was reported Friday that America is pulling out of its job slump having added 257,000 more jobs in January alone.
Just another vacancy in our malls!
Yet another retailer lost and yet just another vacancy to fill after a long stream of filed bankruptcies and store closure announcements this past January. Woman’s Apparel retailer Cache’ has recently joined these ranks since my last update on retail layoffs. Luckily with Radio Shack the more profitable malls will only have a few weeks of a dead locale before Sprint opens its new and improved store locations.
Dead and struggling malls are pictured across our news and blogs reporting the end is near of malls of the US. It is true that a good number of suburban located malls are suffering, and that 15% are expected to close over the next decade, but this is not the end of an era.
Opportunities for Malls in 2015
- Retailers are experiencing a great raise in profits and mall management companies such as Simon are seeing a climb in the stock markets as we pull out of our recession.
- This peak has not only encouraged several retailers to expand their storefront presence but a significant increase in shopping has attracted the eyes of international retailers that have yet to invest on American soil.
- More vacancies has also made it possible for stores that are flourishing to use these empty spaces as an opportunity to expand their storefront and selection and ultimately their earnings.