Friday, June 22, 2018
Business

As RadioShack shrinks, the land of lost retailers gets crowded

The last time I went into a RadioShack store, I bought a small Grundig radio. It was on a whim. And it was 10 years ago.

Therein lies RadioShack's problem. The chain is no longer essential. It failed to evolve into a must-visit destination retailer like Trader Joe's are for foodies or Bass Pro Shops are for the outdoor crowd.

It's the reason why the struggling chain announced this week that it plans to close as many as 1,100 stories.

Thirty-six RadioShacks dot the immediate Tampa Bay area. Throw in Lakeland and Bradenton and that number swells to 51. Across Florida, RadioShacks litter major metro areas more like convenience stores than what they should be: genuinely cool gadget stores.

The bad news is that more than 4,000 — still far too many — RadioShack stores nationwide will remain open. It is an ugly reminder of a chain that lost its way in the electronics wilderness long ago, well before the 2008 bankruptcy of Circuit City and the more recent analyst reports questioning the future of Best Buy.

You know something's not working when RadioShack's own CEO, Joe Magnacca, admits to eight of his own stores operating within 5 miles of his home. A RadioShack is not a Starbucks, a place where lots of people want to stop by every day. Too many RadioShacks just cannibalize the chain's sales.

Not that fading RadioShack is alone. The recent recession, the decline in middle class disposable income and the uptick in more innovative online shopping options have combined to give old-school retail chains the fits as they try to win back and keep shoppers coming to their brick and mortar stores.

The list grows of major retail chains seeking solid footing or to avoid extinction.

J.C. Penney Co. has been a turnaround effort for years with little to show for it. And yet the chain may not be down and out for good. Shares rose 25 percent last week after the company posted decent quarterly results and said it was on track for its first profitable quarter since early 2011. This week, Standard & Poor's changed J.C. Penney's outlook to "stable" from "negative." Still, a stock that traded over $80 in 2007 now trades just over $8.

Sears/Kmart lost $358 million in 2013 and $489 million the year before. Not exactly a turnaround in the making. Sears CEO Eddie Lampert suggests things may be improving, despite the recent "tough-to-terrible holiday season." But is wooing young folks by launching clothing collections from pop stars Adam Levine and Nicki Minaj in 500 Kmart stores really the future?

Then there's Winn-Dixie. Why pick on this chain when it is absorbing all of Tampa Bay's Sweetbay Supermarkets? W-D may have outlasted smaller Sweetbay, but it faces serious uphill battles. Since 2011, Winn-Dixie has lagged in keeping its shoppers happy. The recent American Consumer Satisfaction Index score for the chain dropped last year even as it rose within the sector.

Don't forget Barnes & Noble. When competing Borders folded, B&N was briefly viewed as a survivor. Maybe. While its Nook e-reader falls behind more innovative tablets, the book chain did return to profitability in the holiday quarter.

Can it — for that matter, can any of those troubled retailers — withstand Amazon?

Contact Robert Trigaux at [email protected]

     
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