RadioShack, the retailer that supplied our go-to electronic needs, was born in Boston in 1921. It was the brainchild of brothers Theodore and Milton Deutschmann, who sold ship radio equipment and amateur radios through a small retail outlet and mail-order catalogue to hobbyists. Originally spelled “Radio Shack,” the retailer had gotten its name from the small wooden structure on board ships that houses radio equipment.
As the company grew up, so did its ambitions. The Deutschmann brothers had expanded the business to nine retail stores in the Boston area, and had branched into the music market by the late 1940s.
MORE BOSTON: The Key to Quick Global Expansion »
But when the 1960s rolled around, RadioShack hit some static. The company was on the verge of bankruptcy in 1963 when Charles Tandy, of leather retailer Tandy Corp., lent a helping hand and purchased the company for US$300,000.
Under Tandy’s wing, RadioShack got a second chance. It wasn’t just catering to do-it-yourselfers anymore, but to anyone who was on the hunt for the latest gadgets. In the process, it also got a second home, moving to Fort Worth, Texas, where Tandy’s leather-goods company had been based.
MORE LEATHER: How to Sell Authenticity »
At its peak, RadioShack was opening three stores a day. In the 1970s, when CB radios were growing in popularity, customers flocked to RadioShack making it the leading retailer of the devices. But when it looked like the market for CB radios was faltering, RadioShack looked to add new skills to its repertoire. In 1977, the company introduced the TRS-80, one of the first mass-produced personal computers, and initially outsold Apple thanks to its 5,000 company-owned locations and franchisees. RadioShack was prepared to enter the new decade at the forefront of the computer revolution.
But the firm failed to capitalize on its early success and missed the opportunity to fully embrace the technology shift. Its computer business faltered and appeared increasingly old-fashioned as companies like IBM and Dell sold more powerful computers to customers. RadioShack added mobile phones to the business in 1984, which gave them a new market to focus on; a year later they started selling satellite television systems and service.
MORE MOBILE: The Huge Opportunity of Mobile Payments »
In 1993 it seemed as though RadioShack had finally hit its mid-life crisis when it started casting off its computer and circuit board business, and sold off its cellphone manufacturing business. RadioShack started looking for other opportunities to throw itself into, but rather than focus on improving itself with the offerings it already had, the company tried out new concepts with new stores to address customers’ needs: Computer City to sell computers, Famous Brand Electronics for refurbished electronics, McDuff and Video Concepts for audio and video, Energy Express to sell batteries, and Incredible Universe, which showed a strong resemblance to Best Buy.
But this fleet of new stores proved to be distractions from the company’s need to address its core business, and eventually all of the new concept stores were either closed or sold off by the late 1990s.
MORE CONCEPT STORES: Get to Know the Mall of the Future »
Despite falling on some hard times, RadioShack’s decades-long reputation as the go-to store for electronics gear carried it over the rough patches. During the dot-com bubble, the company’s stock hit a high of $78.50 a share. But by that time, big box stores like Best Buy were capturing the majority of the electronics business and RadioShack was again getting pushed to the sidelines.
The company tried to stay relevant with a new business model that focused on mobile, and it looked like in 2004 RadioShack was slowly turning over a new leaf with some initial successes from kiosks in Sam’s Clubs. But when it became too successful, Sam’s Club’s parent company, Walmart, took away the contract and kicked them out.
MORE WALMART: What You Can Learn From Walmart’s Mistakes »
In late 2013, the electronics chain got a helping hand and a $250 million loan from Salus Capital Partners, an investment firm owned by Harbinger Group Inc. The handout came with strings attached: Salus had to sign off if RadioShack wanted to close more than 200 stores a year—essentially giving the firm power over one of the company’s only ways to raise cash.
Equipped with more funds, RadioShack attempted to turn itself around, yet again. In early 2014, it spent $4 million on a Super Bowl commercial that poked fun at itself for not adapting to the shift in technology early enough, but it was an expensive effort that may have been too late. In March, in an attempt to free up some cash, RadioShack tried to close about 1,100 stores, or about a fifth of its U.S. locations; two months later the company announced that its lenders, including Salus, had quashed those plans. The company reported in a quarterly earnings statement in December that it closed only 175 stores in 2014.
MORE FOOTBALL: Do Super Bowl Ads Even Work? »
With finances getting squeezed, RadioShack scrambled to refinance its debt last fall. Its largest shareholder, the hedge fund Standard General, stepped in to help and provided $120 million in liquidity. The injection kept the electronics chain solvent for the 2014 holiday season.
RadioShack filed for bankruptcy protection on February 5, 2015. The consumer electronics chain had struck a deal just before its Chapter 11 filing in Delaware, which will see a sale of up to 2,400 of its stores to the U.S. wireless provider Sprint and its biggest shareholder Standard General. Sprint will keep the RadioShack brand alive in the form of “store within a store” departments in up to 1,750 of those locations. The remaining company-owned RadioShack locations will be closed. The company was 94 years old.
MORE LAMENTS FOR FALLEN COMPANIES:
- How Not to Disrupt and Industry »
- Falling Behind the Competition Can Be Fatal »
- Can You Chase a Fad Too Far? »
- The Marketing Lessons from Got Milk?s Demise »