What doomed RadioShack? It was the iPhone, but not in the way that you might think. Back in the mid-oughts, the Shack bet its future on selling mobile phones and accessories. While being able to shop multiple carriers in one store was a definite advantage, depending on phone sales revenue was a bad plan as smartphones became popular. As the smartphone rose, retailers’ margin on phone sales fell.
RadioShack has been losing money for the past eleven quarters, or more than two and a half years. They currently have around 4,300 stores, and fewer than 1,000 dealer locations inside other stores.
Our thoughts remain with the employees of Radio Shack during this sad time. Even the ones who aggressively pushed extended warranties.
Strategic Confusion Put RadioShack at Mercy of Lenders [Wall Street Journal]