In the latest edition of Texas Monthly, I discuss the long, slow decline of Radio Shack and take a look at the retailer’s grim prospects for the future. Radio Shack is one of those iconic stores that played a big role in many childhoods, including my own. My brother was a Radio Shack regular, between building kit electronics and looking for components for various science fair projects.
If it wasn’t the stores that you spent time in, then it’s likely you had some experience with the company’s early personal computers, the TRS-80 or the first laptop, the Model 100. Those glory days, however, are long gone.
During the Super Bowl last February, RadioShack ran an ad in which a mob of eighties pop-culture icons, including Erik Estrada, Hulk Hogan, and the California Raisins, looted one of its stores to the pounding beat of Loverboy’s “Working for the Weekend.” The tagline: “It’s time for a new RadioShack.”
Actually, it’s way past time for a new RadioShack. A month after the big game, the company reported a $400 million loss for the year. Sales had tumbled 15 percent from 2011, the last time the company made a profit. This year, sales for the first six months dropped another 18 percent. In September, RadioShack warned investors that if it couldn’t restructure its debt, it might have to file for bankruptcy. Even some of its lenders seem to think its demise is inevitable. Earlier this year, RadioShack said it would close 1,100 of its 4,400 stores to save money. Lenders blocked the deal, presumably to force the company into bankruptcy. As secured creditors, they would gain control of RadioShack and could shed whatever assets and employees they wanted.
In short, we shouldn’t expect to see a funny RadioShack ad during this season’s Super Bowl. The company may be in bankruptcy by then—if not liquidation.