WEBVTT - Feeling Lost inside RadioShack 0:00:04.120 --> 0:00:06.880 Welcome to the Brink, a production of I Heart Radio's 0:00:06.960 --> 0:00:15.640 How Stuff Works. Radio Shack, a little low place where 0:00:15.680 --> 0:00:19.079 we could get electronics, went ham and became a hobbyist mecca. 0:00:19.320 --> 0:00:22.159 But that billion dollar company couldn't focus its interests and 0:00:22.239 --> 0:00:25.560 delved into many projects to try to stay cutting edge. This, 0:00:25.760 --> 0:00:28.200 along with a rotating door of C e O s, 0:00:28.240 --> 0:00:31.319 put a major kink in their cable, leading them to 0:00:31.480 --> 0:00:35.960 not one but two bankruptcies, sprinting to stay afloat find 0:00:36.000 --> 0:00:49.440 out how on Radio Shack on the Brink. Hey guys, 0:00:49.440 --> 0:00:53.120 I'm Jonathan and I'm Ariel, And I apologize that was 0:00:53.360 --> 0:00:55.200 a little bit of a weaker intro than I don't 0:00:55.600 --> 0:00:57.560 right when I saw that intro, I was just like, well, 0:00:57.720 --> 0:00:59.880 this is clearly love Shack. I'm going to have to 0:01:00.040 --> 0:01:02.840 our Fred Schneider. Was I just I didn't set myself 0:01:02.920 --> 0:01:06.280 up to continue the joke. Yeah, that's fair, that's fair. Uh. 0:01:06.360 --> 0:01:08.720 And also we are based out of Atlanta, so we 0:01:08.760 --> 0:01:12.520 have a particular affinity for B fifty two. Yes, yes, 0:01:12.760 --> 0:01:18.280 I was gonna be like, hey, I'm Radio, Well we 0:01:18.360 --> 0:01:21.280 are not talking about B fifty twos today. I wish 0:01:21.319 --> 0:01:23.880 we were, because that would be rock and roll. But 0:01:23.959 --> 0:01:27.119 we're talking about Radio Shack, a company I remember well 0:01:27.160 --> 0:01:30.119 because you know, I grew up in the nineteen eighties 0:01:30.200 --> 0:01:32.160 mall culture, and there was a radio Shack and just 0:01:32.200 --> 0:01:35.240 about every mall, and I have lots of memories of 0:01:35.280 --> 0:01:38.039 going into those places and looking around and thinking I 0:01:38.080 --> 0:01:40.000 should really want to buy stuff in here, but I 0:01:40.040 --> 0:01:42.039 can't find things I want to buy because it turned 0:01:42.040 --> 0:01:45.080 out I didn't have any needs for diodes or anything. Yeah, 0:01:45.120 --> 0:01:47.960 they had a niche market, and then they had a 0:01:48.000 --> 0:01:49.920 bizarre market, and then they had no market. And we'll 0:01:49.920 --> 0:01:52.680 get into that um, but before we do, I just 0:01:52.720 --> 0:01:56.080 want to say that this is another listener suggestion who 0:01:56.160 --> 0:02:00.120 asked for this Sarah Rosenbaum asked for this one an 0:02:00.120 --> 0:02:02.320 excellent So, Sarah, this is This is the story of 0:02:02.400 --> 0:02:04.720 Radio Shack, and we're gonna give you a quick down 0:02:04.720 --> 0:02:09.560 and dirty rundown of the history. So it was founded 0:02:09.600 --> 0:02:13.440 in nineteen in Boston, Boston. In fact, that's where it 0:02:13.560 --> 0:02:18.200 stayed for forty years. It was just in Boston. There 0:02:18.200 --> 0:02:21.520 were a couple of brothers, Theodore and Milton Deutschmann, who 0:02:21.960 --> 0:02:25.079 created the store, and they were you know, it's kind 0:02:25.080 --> 0:02:28.600 of they had come out of the catalog retail business. Yeah, 0:02:28.680 --> 0:02:32.760 they were. They were selling surplus items, largely radio pieces 0:02:32.800 --> 0:02:35.760 from they had gotten from the army, plus army pieces, 0:02:36.080 --> 0:02:38.640 so they were just a single store and then they 0:02:38.680 --> 0:02:42.200 started selling. They really didn't release their first official catalog 0:02:42.240 --> 0:02:44.120 till a while after they started, but they were still 0:02:44.400 --> 0:02:48.400 mail ordering and they were mostly focused on Ham radios, 0:02:48.440 --> 0:02:51.640 as the intro suggested, not like you know, your your 0:02:51.680 --> 0:02:55.480 standard transistor. Radio transistors weren't a thing yet in nineteen twenty, 0:02:56.120 --> 0:02:59.280 so these were the sort of radio sets you would 0:02:59.280 --> 0:03:02.720 set up at home and used to broadcast and receive 0:03:02.960 --> 0:03:06.640 from other Ham radio operators, a lot of amateur radio operators, 0:03:07.400 --> 0:03:12.119 so you know, to put this in perspective, Boston got 0:03:12.160 --> 0:03:16.720 its first commercial radio station in the same year that 0:03:16.840 --> 0:03:20.280 Radio Shack opened, so that so commercial radio was not 0:03:20.440 --> 0:03:23.040 really a thing yet. There had been some amateur radio 0:03:23.560 --> 0:03:28.720 enthusiast who had been broadcasting on limited licenses, but licensed 0:03:28.720 --> 0:03:31.200 commercial radio was just starting to become a thing, so 0:03:31.760 --> 0:03:34.760 different era. Yeah, and they were really focused towards those 0:03:34.800 --> 0:03:39.400 hobbyists and making this hobby more accessible to everyone, kind 0:03:39.400 --> 0:03:41.760 of like code acted with their cameras. But the thing is, 0:03:41.800 --> 0:03:44.800 at the time there weren't really many stores doing this. 0:03:44.920 --> 0:03:47.960 Not only were radio's cutting edge, but this whole electronics 0:03:47.960 --> 0:03:51.000 hobby thing was also kind of news. So they were 0:03:51.040 --> 0:03:53.640 a front runner in this business at the time. It 0:03:53.720 --> 0:03:56.760 was also kind of hard to sustain because you're talking 0:03:56.760 --> 0:04:00.920 about a niche market already, right Like, you're you're catering 0:04:01.000 --> 0:04:06.120 to by definition, a small group of people, So building 0:04:06.120 --> 0:04:09.640 and maintaining a business on top of that was challenging. 0:04:09.680 --> 0:04:11.400 I mean, they did well for a little while, but 0:04:11.480 --> 0:04:15.400 it was it was small. In fact, as I said before, 0:04:15.440 --> 0:04:17.440 they didn't issue their catalog for a while. It wasn't 0:04:17.440 --> 0:04:22.880 until their first official catalog came out and it over 0:04:22.920 --> 0:04:25.000 the next couple of decades they only grew their stores 0:04:25.040 --> 0:04:27.880 to like nine they only had nine stores, yeah, all 0:04:27.920 --> 0:04:32.520 in the Boston area, and they were opening up to 0:04:32.640 --> 0:04:37.640 other areas of electronics as they were coming onto the market. Yep, 0:04:37.880 --> 0:04:41.039 they added music as one of the things they were offering, 0:04:41.480 --> 0:04:43.479 which makes sense because this is right around the same 0:04:43.480 --> 0:04:46.360 time that you started getting things like not just the 0:04:47.360 --> 0:04:49.440 radio sets that were meant to just pick up the 0:04:49.480 --> 0:04:53.760 commercial radio stations, but also things like gramophones things like that, 0:04:53.839 --> 0:04:56.240 you know, things that could play recorded music trying to 0:04:56.320 --> 0:04:59.760 keep up with the change in the industry. Now in 0:04:59.760 --> 0:05:04.080 the fifties, radio shacks started selling private label products and 0:05:04.080 --> 0:05:06.520 this is something that they would toy with over the years, 0:05:06.560 --> 0:05:09.800 just creating their own versions of whatever the hot new 0:05:09.839 --> 0:05:12.840 tech item was, or pieces to make your own version 0:05:12.839 --> 0:05:15.200 of the hot new tech item. And by the early 0:05:15.240 --> 0:05:17.760 sixties they were a leader in the market. So they 0:05:17.800 --> 0:05:19.920 were a front runner, but they really made a niche 0:05:19.920 --> 0:05:22.839 for themselves. But then they made a mistake. And I 0:05:22.880 --> 0:05:25.480 can't even say that I would say looking at it 0:05:26.120 --> 0:05:28.320 that you you could know it was mistake. They offered 0:05:28.320 --> 0:05:30.600 credit in their store. So it was only a mistake 0:05:30.640 --> 0:05:34.279 in hindsight, as they offered credit at their stores, but 0:05:34.320 --> 0:05:38.400 then found it very difficult to collect upon debts to them. 0:05:38.400 --> 0:05:41.880 But Macy's did fine with credits. So yeah, so they 0:05:41.960 --> 0:05:46.599 were in deep financial trouble by the early nineteen sixties. 0:05:46.640 --> 0:05:50.080 And that's when a guy named Charles Tandy, the leader 0:05:50.160 --> 0:05:56.479 of the Tandy Corporation, sweeps in to purchase the company. Yeah, 0:05:56.600 --> 0:05:59.840 for a whole three hundred thousand dollars. Yeah, and this 0:05:59.880 --> 0:06:04.039 is still nine stores in Boston and the Tandy Corporation 0:06:04.920 --> 0:06:08.760 people who have were around in the eighties. Might think 0:06:08.760 --> 0:06:11.520 of Tandy Computers, that is in fact the same company, 0:06:11.800 --> 0:06:15.360 but I think of leather. That's exactly when she started off. Yeah, 0:06:15.400 --> 0:06:17.840 there were a leather company. So it's kind of one 0:06:17.880 --> 0:06:19.479 of those stories where you had a company that was 0:06:19.520 --> 0:06:25.560 specialized in a particular product and then diversified to almost 0:06:25.600 --> 0:06:31.320 a ludicrous degree. Charles Tandy was determined to really diversify 0:06:31.440 --> 0:06:35.520 the company's holdings. Radio Shack was just one of many purchases. 0:06:35.600 --> 0:06:38.440 He wanted to be the Disney of retail. It sounds like, yeah, 0:06:38.520 --> 0:06:42.240 and he ended up buying like Dillard's and Peer One 0:06:42.400 --> 0:06:44.839 and a couple of other types of stores as well 0:06:45.000 --> 0:06:48.480 during the same era. And he also wanted to really 0:06:48.600 --> 0:06:51.560 scale up, like he wanted to build Radio Shack well 0:06:51.680 --> 0:06:54.760 outside of the Boston area, and he did. They not 0:06:54.880 --> 0:06:58.360 only increase their numbers of stores drastically, which is something 0:06:58.400 --> 0:07:00.920 that would come back and bite Deo Shock in the 0:07:00.960 --> 0:07:05.480 proverbial butt later, but also in expanding what they offered, 0:07:05.839 --> 0:07:08.800 so still trying to stay current with the market and 0:07:08.800 --> 0:07:12.280 and catch whatever those trends coming down the line were right. 0:07:12.360 --> 0:07:17.280 So the Tandy Corporation ends up selling off all of 0:07:17.320 --> 0:07:24.560 its non electronics businesses, so they d diversify, but they 0:07:24.560 --> 0:07:27.480 focus on electronics. Yeah. Now this is the era where 0:07:27.560 --> 0:07:32.840 they would start to dip their toe in the brand new, 0:07:32.960 --> 0:07:36.760 in fact, not even established market of personal computers. I 0:07:37.000 --> 0:07:38.960 want to say a quick aside. They sold off all 0:07:39.000 --> 0:07:42.560 of their non electronic businesses. But I'll still go to 0:07:42.600 --> 0:07:46.280 Tandy Leather occasionally, so still out there. Yes, it is 0:07:46.320 --> 0:07:49.680 still there. Yes, sorry, I just had to put that aside. 0:07:49.680 --> 0:07:51.760 All right, back to radio show. Come on, we're not 0:07:51.800 --> 0:07:54.840 talking about Tandy in this kind of are a little 0:07:54.880 --> 0:07:56.560 bit all right. So, Yeah, and the A D S 0:07:56.600 --> 0:07:59.760 they developed personal computers, and they actually started a little 0:07:59.760 --> 0:08:02.320 early er than the eighties. They started in nine seven 0:08:02.440 --> 0:08:04.600 is when their first Peter came out. It was the 0:08:04.640 --> 0:08:07.400 t R S E D and it's sold better than 0:08:07.440 --> 0:08:09.480 the Apple computer of the time. It was just at 0:08:09.520 --> 0:08:13.280 the beginning of personal computers. Yeah, they were really pioneers 0:08:13.280 --> 0:08:15.880 in the space for personal computers. Before this, you had 0:08:16.200 --> 0:08:19.400 hobby kits that would be sold to hobbyists, but that 0:08:19.400 --> 0:08:23.280 that by definition really limited who could buy because there's 0:08:23.280 --> 0:08:26.840 only people who felt confident that they could wire one together. Yeah, 0:08:26.880 --> 0:08:30.680 but electronic hobbies was radio shacked niche, So it made 0:08:30.680 --> 0:08:32.600 sense that they would delve into well, if you want 0:08:32.600 --> 0:08:34.760 to build a computer, but you don't know how, here's 0:08:34.760 --> 0:08:37.000 a computer. Yeah, here's a fully assembled machine that you 0:08:37.040 --> 0:08:38.640 can purchase right now, and you can have your own 0:08:38.679 --> 0:08:41.839 personal computer. Uh. The t R S A D is 0:08:41.880 --> 0:08:47.040 affectionately called the trash a D despite selling over two 0:08:47.120 --> 0:08:50.160 hundred thousand of them. Yeah, there were issues with that computer, 0:08:50.400 --> 0:08:54.480 and there would also be issues with radio checks PC strategy, 0:08:54.520 --> 0:08:56.480 and we'll we'll touch on that now and again throughout 0:08:56.480 --> 0:08:58.360 this episode. Also by the A D S they were 0:08:58.400 --> 0:09:02.400 up to thousands of stores from the original nine. Uh. 0:09:02.480 --> 0:09:05.200 And in eighty one they got a new CEO. Yeah, 0:09:05.240 --> 0:09:08.440 the Tandy had passed away in the seventies and then 0:09:08.559 --> 0:09:11.760 their their interim CEO left and so in eighty one 0:09:11.760 --> 0:09:13.679 they get their new one. But this is also the 0:09:13.720 --> 0:09:18.000 time where they start hitting a stalling point because now 0:09:18.040 --> 0:09:21.040 their computer, which had issues but was still selling, was 0:09:21.120 --> 0:09:24.280 being outclassed by IBM and Dell. On the startup side, 0:09:24.280 --> 0:09:27.120 they had Apple to fight with and Dell, and then 0:09:27.360 --> 0:09:29.640 on the established side you had IBM. They were kind 0:09:29.640 --> 0:09:32.720 of caught in the middle, and they weren't innovative enough 0:09:32.960 --> 0:09:36.880 to stand out like Apple did, and they weren't established 0:09:36.960 --> 0:09:39.480 enough in the PC space or the computer space, I 0:09:39.480 --> 0:09:42.960 should say that they could really compete with IBM. IBM 0:09:43.000 --> 0:09:46.800 had sort of the business side like for all small 0:09:46.800 --> 0:09:49.840 and medium and large businesses that that's those the companies 0:09:49.840 --> 0:09:52.680 went to IBM for their computers, and then home users, 0:09:52.920 --> 0:09:56.040 more and more people were either going with Commodore or Apple. 0:09:56.520 --> 0:09:59.520 Man I had a Commodore At this time, they pushed 0:09:59.640 --> 0:10:03.680 their goals for computer sales down to less than of 0:10:03.679 --> 0:10:07.240 their sales. Yeah, they figured that the writing was on 0:10:07.280 --> 0:10:10.160 the wall and that if they dedicated too much of 0:10:10.200 --> 0:10:14.040 their effort toward trying to sell these computers, they would 0:10:14.080 --> 0:10:16.640 ultimately just be hurting their bottom line. So it was 0:10:16.679 --> 0:10:19.520 it was almost like, let's sell what we have left, 0:10:19.600 --> 0:10:23.680 but let's not focus on that as our primary revenue source. 0:10:23.880 --> 0:10:28.319 And and this led to a restructure to shift gears 0:10:28.320 --> 0:10:30.319 and and and to really try to go into more 0:10:30.360 --> 0:10:34.840 mainstream electronics for them. Now we'll talk more about how 0:10:34.880 --> 0:10:38.200 that effort actually turned out in just a moment, but 0:10:38.320 --> 0:10:49.640 first let's take a quick break. All right, let's backtrack 0:10:49.760 --> 0:10:51.800 just a bit. Areal we had just mentioned before the 0:10:51.840 --> 0:10:54.840 break that in the early nineties that would lead to 0:10:54.840 --> 0:11:00.160 a restructuring of their uh their businesses. But in for 0:11:00.600 --> 0:11:03.720 we have an example of Radio Shack getting into a 0:11:03.760 --> 0:11:08.000 specific area of electronics that would become both important to 0:11:08.040 --> 0:11:11.120 the company and ultimately down the road, kind of an 0:11:11.160 --> 0:11:15.199 albatross around the company's proverbial neck. Yeah, So in eighty 0:11:15.240 --> 0:11:17.720 four they sold their first home phone, so they went 0:11:17.920 --> 0:11:21.000 into the phone industry, figuring that would be a big trend. 0:11:21.520 --> 0:11:23.960 And they also the next year went into satellite TV. 0:11:24.280 --> 0:11:27.360 Both of these things they held onto for a really 0:11:27.400 --> 0:11:31.160 long time, and the phone, the phones in particular, would 0:11:31.200 --> 0:11:34.000 end up being kind of a weight around their neck, 0:11:34.520 --> 0:11:36.240 but they kept trying for it. And I don't know 0:11:36.240 --> 0:11:40.199 why really at this time, Radio Shack is so desperate, 0:11:40.960 --> 0:11:43.360 and I feel like it was maybe a little bit 0:11:43.400 --> 0:11:45.560 sooner than they needed to be, and maybe the reason 0:11:45.679 --> 0:11:48.120 that they declined so much, they were so desperate to 0:11:48.160 --> 0:11:51.440 stay relevant that they just spread their net far and 0:11:51.520 --> 0:11:54.200 wide as to what they needed to do to to 0:11:54.280 --> 0:11:57.800 make their company profitable and successful. So they moved into 0:11:57.800 --> 0:12:02.000 cell phones, they moved into satellite TV, opened up specialty 0:12:02.160 --> 0:12:06.880 stores like Computer City and Energy Express Plus, which sold 0:12:06.880 --> 0:12:12.679 batteries and Incredible Universe, which is basically Fries. And later 0:12:12.720 --> 0:12:14.760 on when they closed all those because that didn't work, 0:12:16.040 --> 0:12:18.400 they sold off Incredible Universe to Fries. Because when I 0:12:18.440 --> 0:12:21.120 was reading the description of what how an Incredible Universe 0:12:21.160 --> 0:12:23.120 was set up, it was it was made to compete 0:12:23.120 --> 0:12:25.840 with best Buy. Um, yeah, we used to have an 0:12:25.880 --> 0:12:28.200 Incredible Universe here in the Atlanta area. I take it 0:12:28.240 --> 0:12:29.920 you never went. I never went, but I've been to 0:12:30.000 --> 0:12:32.319 Fries and I was like, well, this is the same layout. 0:12:32.400 --> 0:12:35.679 So the Incredible Universe that was here in Atlanta not 0:12:35.800 --> 0:12:38.880 only did they sell electronics and stuff, but and this 0:12:38.920 --> 0:12:43.319 is a little side note, they had a recording booth 0:12:43.400 --> 0:12:48.240 where you could record yourself doing karaoke and they would 0:12:48.240 --> 0:12:53.160 actually burn it to uh desk or or they'd actually 0:12:53.200 --> 0:12:55.800 even recorded to cassette back in the day, and then 0:12:55.800 --> 0:12:59.800 you would have your own recording of you doing karaoke. 0:13:00.040 --> 0:13:03.599 And that's why somewhere floating around my house there's a 0:13:03.640 --> 0:13:06.280 recording of me doing I Fought the Law and the 0:13:06.360 --> 0:13:10.440 Law one that's French Schneider from Theft two. When I 0:13:10.480 --> 0:13:13.200 hear that, Um, so you know, I went a little 0:13:13.200 --> 0:13:15.719 bit into how they diversified all these stores and how 0:13:15.720 --> 0:13:18.559 they eventually closed off. On the cell phone side of it. 0:13:19.240 --> 0:13:21.920 They moved into cell phones in nine that caused a 0:13:21.960 --> 0:13:24.520 lot of problems because it tied up their employees in 0:13:24.679 --> 0:13:26.720 the registration process. If you've ever bought a cell phone, 0:13:26.760 --> 0:13:30.520 which I'm guessing most of our listeners have, it takes 0:13:30.520 --> 0:13:32.680 a while to set up for the first time where 0:13:32.679 --> 0:13:37.360 you're actually establishing your your phone number, you're establishing your account, 0:13:37.520 --> 0:13:40.120 which would be most people at that time. Yeah, back 0:13:40.120 --> 0:13:42.560 in the early ninees, that's when everyone's first doing. I 0:13:42.559 --> 0:13:45.680 mean I didn't get one until the late nineties for me, 0:13:45.800 --> 0:13:48.880 but but still, I mean I remember distinctly like that 0:13:49.000 --> 0:13:51.760 was a long and involved process. If you're talking about 0:13:51.800 --> 0:13:55.200 stores that typically were fairly small and had, you know, 0:13:55.200 --> 0:13:58.560 a relatively small staff, maybe three or four people working 0:13:58.600 --> 0:14:01.240 the store at any given time, tying them up in 0:14:01.280 --> 0:14:06.319 a forty five minute process was a bit of a hindrance. 0:14:06.440 --> 0:14:08.600 And on top of that, and I'll talk more about 0:14:08.600 --> 0:14:12.760 this later in the episode two. At radio Shack salespeople 0:14:13.080 --> 0:14:16.960 were given an incentive by earning a commission on sales 0:14:17.040 --> 0:14:21.200 if they reached a certain amount per per sale. So 0:14:22.400 --> 0:14:25.560 if you're tying up a salesperson for forty five minutes, 0:14:26.240 --> 0:14:30.600 and that person also is counting on commissions to make 0:14:30.680 --> 0:14:33.720 up part of their compensation. That's got to be a 0:14:33.760 --> 0:14:36.360 stressful environment too, because that's forty five minutes when you 0:14:36.400 --> 0:14:38.600 can't be selling other stuff to other people. Well, and 0:14:38.640 --> 0:14:40.520 then that's forty five minutes other people who want to 0:14:40.560 --> 0:14:42.920 buy other stuff don't have somebody to help them find it. 0:14:43.640 --> 0:14:45.680 Along with that, in two thousand and four, they tried 0:14:45.840 --> 0:14:49.120 remote kiosks to sell their phones or other people's phones, 0:14:49.320 --> 0:14:52.360 like in Sam's Club Target, and that didn't go very well. 0:14:52.360 --> 0:14:54.360 It started to and then it fell apart. And then 0:14:54.400 --> 0:14:57.400 in two thousand and fifteen, when they were really in 0:14:57.480 --> 0:14:59.600 the mire, they did a partnership with Sprint, and that 0:14:59.720 --> 0:15:03.040 also it didn't go well. So for over twenty years 0:15:03.080 --> 0:15:05.440 they tried to make cell phones work, figuring that would 0:15:05.480 --> 0:15:07.640 be where their big market was, and it never seemed 0:15:07.640 --> 0:15:09.600 to work. It makes me wonder why they stuck with 0:15:09.600 --> 0:15:12.200 it for so long. Yeah, well, and part of it 0:15:12.280 --> 0:15:15.680 might have just been this misguided desire to try and 0:15:15.840 --> 0:15:21.160 counteract that trend they had where they weren't focusing on 0:15:21.200 --> 0:15:23.880 stuff where they were taking that more you know, widespread, 0:15:23.920 --> 0:15:28.120 wide net approach where you're not giving any one part 0:15:28.120 --> 0:15:31.000 of your business a deep level of attention. It's just 0:15:31.040 --> 0:15:36.640 that they ended up picking perhaps the worst, the worst 0:15:36.640 --> 0:15:39.120 of their mini businesses to really focus on. Yeah. So 0:15:40.920 --> 0:15:43.040 after all of their spinoff stores had closed and they 0:15:43.080 --> 0:15:46.760 just had the original Radio Shacks, which we're doing okay, Yeah, 0:15:47.000 --> 0:15:49.920 they kind of hit their peak. It's the best year 0:15:49.960 --> 0:15:52.560 for Radio Shack. And they opened their website quite a 0:15:52.600 --> 0:15:56.440 few years after Amazon came on the scene. Yeah. Yeah, 0:15:56.480 --> 0:15:59.240 this is another one of those things that a lot 0:15:59.240 --> 0:16:02.480 of people point to, Like if you do a web 0:16:02.520 --> 0:16:06.200 search for why did Radio Shack go bankrupt? They're usually 0:16:06.240 --> 0:16:08.640 five or six points that are most of those articles 0:16:08.680 --> 0:16:11.240 really focus on. And we just talked about two of them. 0:16:11.280 --> 0:16:14.480 The cell phones are a big one, and then the 0:16:14.600 --> 0:16:19.200 late jump on the internet commerce side was another big one. Well, 0:16:19.240 --> 0:16:23.520 and even wasn't really commerce. You could you could read 0:16:23.520 --> 0:16:25.240 press releases and you could find a store, but you 0:16:25.280 --> 0:16:28.320 couldn't buy anything. Yeah. So even then they were like 0:16:28.560 --> 0:16:31.600 they were even further behind because it would take time 0:16:31.640 --> 0:16:35.560 before they would start to offer any sort of online sales. Yes, 0:16:35.800 --> 0:16:40.040 and then they got a new CEO. Yeah, and get 0:16:40.120 --> 0:16:44.240 used to get used to that sentence. Yeah. Yeah, Now 0:16:44.280 --> 0:16:46.840 the CEO did something good. He did the stores in 0:16:46.880 --> 0:16:48.520 the store model, so all the places you could buy 0:16:48.560 --> 0:16:51.480 use subscriptions had their own like little sections in Radio 0:16:51.520 --> 0:16:55.440 Shack your satellite TV, your self service, your Internet. He 0:16:55.560 --> 0:16:58.560 was one of the first to do this. Uh. And 0:16:58.600 --> 0:17:01.760 in two thousand, you know, things were going good, Tandy 0:17:01.920 --> 0:17:04.920 changed their name to the Radio Shot Corporation. Yeah. So 0:17:05.000 --> 0:17:07.720 Tandy at this point is taking the identity of one 0:17:07.720 --> 0:17:13.280 of its subsidiaries essentially. But Radio Shack was really facing 0:17:13.400 --> 0:17:18.040 stiff competition, not just online through Amazon, which was growing 0:17:18.240 --> 0:17:22.680 rapidly and starting to build upon its original business as 0:17:22.680 --> 0:17:26.520 an online bookstore by offering other stuff, but also with 0:17:26.640 --> 0:17:31.600 the big box stores that were dominating the market. It 0:17:31.680 --> 0:17:35.800 was also tough because the general perception was that the 0:17:35.880 --> 0:17:38.639 stuff you could buy at Radio Shack was not different 0:17:38.680 --> 0:17:40.080 than the stuff you could buy at a lot of 0:17:40.119 --> 0:17:43.800 other places, but also was more expensive. Yeah, they didn't. 0:17:43.840 --> 0:17:46.080 They couldn't make up the price elsewhere like Walmart could 0:17:46.200 --> 0:17:48.399 or like Best Buy could. Now they didn't have lost 0:17:48.520 --> 0:17:52.000 leaders like a lot of other stores did. So um, 0:17:52.040 --> 0:17:56.040 they they tried to compensate that for that by having 0:17:56.760 --> 0:18:02.040 knowledgeable employees who could help guide customers for stuff that 0:18:02.080 --> 0:18:06.760 they needed, but that wasn't quite enough to to counteract 0:18:06.880 --> 0:18:10.199 this problem. Yeah. Another another thing is because they were 0:18:10.200 --> 0:18:12.560 trying to compete with Best Buy, they ended up having 0:18:12.560 --> 0:18:16.600 this really weird mix of hobbyist pieces and periphery items 0:18:16.680 --> 0:18:20.360 and then weird obscure gadgets that nobody wanted to buy, 0:18:20.400 --> 0:18:23.080 Like the q CAT bar code reader came up quite 0:18:23.119 --> 0:18:25.960 a few times in my research as something that they 0:18:26.000 --> 0:18:28.639 stalked a lot of and nobody knew why they needed it, 0:18:28.680 --> 0:18:31.280 so nobody bought it. Let's skip ahead a little bit 0:18:31.320 --> 0:18:36.359 further to two thousand five. That's when David Edmondson, who 0:18:36.680 --> 0:18:40.320 had been in Radio Shack since the nineties they had 0:18:40.359 --> 0:18:46.159 held numerous positions, was the new CEO. He lasted for 0:18:46.440 --> 0:18:50.040 all of about a year at CEO. Because here's the problem. 0:18:50.040 --> 0:18:53.320 When you become CEO, if in fact you haven't been 0:18:53.520 --> 0:18:57.400 completely upfront and honest about your background, you typically come 0:18:57.480 --> 0:18:59.919 under a lot of scrutiny when you're leading a company. 0:19:00.280 --> 0:19:04.600 And as it turned out, Edmondson had not been totally 0:19:04.920 --> 0:19:07.800 honest on his resume. No, he said he had a 0:19:07.800 --> 0:19:11.320 couple of college degrees when he had none of those. Yeah, 0:19:11.400 --> 0:19:13.720 And here's the thing is that this is not a 0:19:13.840 --> 0:19:16.679 story unique to Radio Shack. There actually are a few 0:19:17.160 --> 0:19:21.919 high profile stories of executives who rose to a level 0:19:22.000 --> 0:19:26.280 where such FIBs came back to haunt them. So someday, 0:19:26.400 --> 0:19:28.719 I think for the Brink we'll need to do an 0:19:28.720 --> 0:19:32.199 episode where we specifically cover that kind of thing and 0:19:32.280 --> 0:19:37.760 talk about some of the people who have infamously been 0:19:37.840 --> 0:19:42.119 either been forced to resign or chose to leave positions 0:19:42.240 --> 0:19:45.439 because it came to light that they were not entirely 0:19:45.480 --> 0:19:48.000 honest about their backgrounds. I agree. But now back to 0:19:48.080 --> 0:19:51.280 Radio Shack. Yes, So in two thousand six, Radio Shack 0:19:51.440 --> 0:19:55.440 finally started their buy online shipped to store feature. Yeah, 0:19:55.920 --> 0:19:59.280 still not really competing with Amazon because of Amazon, they 0:19:59.280 --> 0:20:02.400 shipped directly to the customers home. And now they're getting losses. 0:20:02.520 --> 0:20:04.679 So now they're also having to close doors to corporate 0:20:04.760 --> 0:20:07.320 layoffs and their stocks are starting to plumb it. Yeah, 0:20:07.760 --> 0:20:09.879 Edmondson was replaced by the interim CEO and that was 0:20:09.920 --> 0:20:12.960 just for a few months, and then Julian Dave replaced 0:20:13.000 --> 0:20:17.439 that interim CEO and became CEO after having been a 0:20:17.520 --> 0:20:20.600 part of kmart before. Yeah. A good track record of 0:20:20.640 --> 0:20:23.240 turning companies around. But yeah, he had this reputation that 0:20:23.320 --> 0:20:28.840 he was able to really, you know, save um companies 0:20:28.880 --> 0:20:32.680 that were struggling. But this was a particularly tough position 0:20:32.720 --> 0:20:34.240 to be in well, and I guess it's kind of 0:20:34.240 --> 0:20:37.400 foreshadowing because Kmart didn't end up doing too well either. 0:20:38.640 --> 0:20:42.680 Then two thousand nine comes around and Radio Shack pulls 0:20:42.720 --> 0:20:45.200 a stunt that would end up making it sort of 0:20:45.200 --> 0:20:49.240 the butt of jokes for about two years. And it 0:20:49.359 --> 0:20:52.600 was a rebranding effort. What was Radio Shack proposing it? 0:20:52.760 --> 0:20:56.480 Do you change their name to the Shack, which when 0:20:56.520 --> 0:21:00.720 I hear I think of the love shockto Ago, Yeah, 0:21:00.760 --> 0:21:04.760 back to the fifty two. Yeah, but not everyone immediately 0:21:04.800 --> 0:21:09.320 thought of a little spot down the Atlanta Highway. A 0:21:09.320 --> 0:21:12.080 lot of people thought that it just made it sound 0:21:12.119 --> 0:21:16.000 like it was kind of this shabby backwoods sort of 0:21:16.040 --> 0:21:19.160 business to call it the Shack. Uh. This was also, 0:21:19.240 --> 0:21:21.520 by the way, the same time that Pizza Hut was 0:21:21.560 --> 0:21:26.600 toying with the idea of just becoming the Hut like Jaba. 0:21:26.960 --> 0:21:30.359 So yeah, this ended up becoming, like I said, a 0:21:30.400 --> 0:21:33.600 punchline for a lot of different outlets. So if you do, 0:21:33.880 --> 0:21:37.520 if you do a search for Radio Shack and the Shack, 0:21:38.119 --> 0:21:40.000 you're gonna get a whole bunch of articles from two 0:21:40.000 --> 0:21:45.520 thousand nine that are just mercilessly making fun of the 0:21:45.600 --> 0:21:49.439 company for trying to be hip and cool and what 0:21:49.720 --> 0:21:54.639 is considered to be a misguided attempt. Yeah. So after 0:21:54.800 --> 0:21:59.840 that failed attempt at success, uh, they have yet more 0:22:00.040 --> 0:22:05.199 CEO turnover two thousand eleven. Two all had new CEOs. 0:22:05.920 --> 0:22:09.120 None of them were able to surmount the rising losses 0:22:09.160 --> 0:22:13.200 that Radio Shack was experiencing, which from two thousand twelve 0:22:13.200 --> 0:22:16.400 on that's all they experienced. They spent two points six 0:22:16.440 --> 0:22:19.919 billion since two thousand up until this time trying to 0:22:20.080 --> 0:22:23.280 purchase their own stock to bolster their share prices. We 0:22:23.400 --> 0:22:26.080 usually save lessons towards the end, but sometimes we might 0:22:26.080 --> 0:22:27.800 as well go ahead and insert them in the middle 0:22:27.800 --> 0:22:29.880 of an episode. And here is one that we've talked 0:22:29.920 --> 0:22:33.199 about numerous times, right the idea that if you have 0:22:33.320 --> 0:22:39.199 an unstable executive team, that spells really bad news for 0:22:39.200 --> 0:22:42.119 the rest of the company, and to not be able 0:22:42.160 --> 0:22:48.560 to establish a stable foundation for leadership, it's no surprise 0:22:48.600 --> 0:22:51.919 that the company was struggling. If you can't keep the 0:22:51.960 --> 0:22:54.960 same CEO for more than a year. Then, as each 0:22:54.960 --> 0:22:58.640 person comes in and attempts to shape the corporation according 0:22:58.680 --> 0:23:03.400 to their own you know, leadership style, You just all 0:23:03.480 --> 0:23:07.080 you have is just an unending period of trying to adjust, 0:23:07.680 --> 0:23:10.719 and just as you're getting close to aligning with the 0:23:10.800 --> 0:23:13.119