I read with concern about Radio Shack filing for bankruptcy in February 2015, not only because they are a large company with thousands of locations and employees, but because in December 2014, Radio Shack re-opened its doors here in Antigua! In fact I bought my 10-year son’s Christmas gift, a tablet, right there at the Woods location.
This had me really concerned!
What will happen here in Antigua?
As I got over my initial shock and concern, my strategic business training kicked in and I had more questions than answers then, both for the local franchisee and for Radio Shack, the franchisor!
For example, with respect to the franchisee:
- Did the owners of the franchise here in Antigua, as well as around the globe, know about the bankruptcy?
- If yes, why would they re-open here, especially a mere month prior to the bankruptcy announcement?
- If not, do they keep up-to-date with their franchisor, which is a public company on the New York Stock Exchange (NYSE) and therefore access to their financial statements are readily available?
For the franchisor, having read the article (below), it begs the question, “Why was Radio Shack so late into restructuring its business and re-branding itself?”
Sadly, this reminds me of the 2008 recession where, I saw many businesses flounder and die, simply because they failed to realize that the market is changing and unless their business changed with the changing times, they would be running an out-dated business.
In 2012, Radio Shack’s CEO James Gooch said, “Our primary operating focus continues to be on stabilizing gross margins and aggressively managing our cost structure.”
Well that’s not so much of a strategy, when other tech companies were launching new products every few months while other companies like Amazon.com were selling the same products cheaper than Radio Shack!
Their business strategy was out-dated and in the end, dragged them down to where we are today.
In the article below, it states that Radio Shack may opt to restructure its debt. Of course, that begs another question of how will they pay it back with the record of losses…
Read the full post here: http://fortune.com/2015/01/14/radioshack-prepares-to-file-for-bankruptcy/
(Photograph by Justin Sullivan—Getty Images)
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