A note from Richard Connor:
When you have to eat crow it’s best to do it in a single bite. Last week, I incorrectly wrote in a column about RadioShack that at one time the company loaned then-CEO Len Roberts $1 million to build a new house. I was wrong, and I have apologized to him.
Mr. Roberts properly disputed my incorrect assertion in a letter that is published in this week’s issue (March 17-23) of the Business Press and posted here following this note. Mr. Roberts also took issue with my criticism of his management of RadioShack and in a follow-up letter also published in this week’s paper and posted here, he highlights the company’s success during his tenure. If my column implied that Len Roberts was responsible for all of RadioShack’s recent financial woes, that was not my intention. Current CEO Joe Magnacca is the sixth person to hold that position since Mr. Roberts’ retirement in 2005; there is plenty of blame to go around as Magnacca works to rectify the company’s past failures.
Mr. Roberts is correct to admonish me for failing to “do better.” I hold myself to the same standard as any reporter, writer or editor who works for our company. A mistake is a mistake; Mr. Roberts and our readers deserve both a correction and an apology.
(Richard Connor is CEO of the Business Press’ parent company, DRC Media. Contact him at rconnor@bizpress.net.)
Len Roberts’ letters responding to critical column
Letter No. 1: I am dismayed and disappointed over your negative comments about me and my role leading RadioShack for 12 years from 1993 until I retired as CEO in 2005. When I first joined Tandy Corporation in 1993, the company was struggling to find its way but had a market cap of just over $1.8 billion dollars. By the time I retired in 2005, the market cap of the company exceeded $ 5.4 billion. Today it is worth less than $220 million.
Thanks to the brilliant, talented and dedicated team at RadioShack, during my tenure as CEO of Tandy/RadioShack, our shareholders and this community were rewarded handsomely. In fact, many of the former and retired executives of Tandy became very wealthy by cashing out of their holdings in the company in the late 1990s, when under my leadership, the market cap of the company exceeded $8 billion. On the other hand, as chairman and CEO of the corporation, I had limited practical ability to monetize my holdings during these glory years of Tandy/RadioShack’s transformation and performance. I only sold enough stock and a very small percentage of my total stock holdings in the company in order to finance the weddings of my three daughters and the construction of our dream home in Fort Worth. I never borrowed a dime from the company for my home or these weddings. Your statement that I borrowed $1 million dollars from the company to build my home was false, hurtful and distasteful, and defamatory. I am very proud of we what accomplished for RadioShack during 1993-2005. We became a close family dedicated to innovation and differentiation. And our efforts paid off handsomely for our shareholders and for tens of thousands of our employees. And our community benefited greatly from this very significant financial success of the company. During these very successful years of RadioShack, I am also proud of my record in giving back to our community and nation. Whether it was leading United Way both locally and nationally, or my involvement with Safe City Commission, FWSO, Bold Initiative, or Texas Health Resources, I believe my heart has always been in the right place. I love this community and believe it is the best city in the world. My wife and I will live here to the end of our days. Finally, I feel RadioShack is very fortunate to have recruited Joseph Magnacca as its CEO. He is a very talented and caring leader. I wish him and the entire team at RadioShack the very best.
I doubt that you will publish my response in your paper, but I at least wanted you to know the facts and to know how hurt I was to read your falsehoods and implications. I know you can do better than this … All my best to you and the Fort Worth Business Press. Len
Letter No. 2 When I was first recruited to Tandy in 1993 as the president of RadioShack, I quickly realized that the prevailing opinion by most senior leadership of the corporation and board, (and Wall Street) was that RadioShack has seen its best days behind it, and that the most important role I could play was to manage RadioShack for its cash flow to help finance the growth of the (subsequent) failed ventures of Incredible Universe and Computer City. It turned out that the brand transformation of RadioShack (You’ve Got Questions, We’ve Got Answers) into new lines of consumer electronics and into critical store-within-store partnerships with Sprint, Verizon, RCA, Microsoft, and IBM changed the entire trajectory and differentiation of RadioShack. RadioShack had 3-4 years of double-digit increases of sales and profits. The stock split twice and the Shack became the darling of the NY Stock Exchange and the retail industry. After losing billions on Computer City and Incredible Universe, these failed ventures were eventually jettisoned or sold off by me and our board. And these new partnerships did not dilute the rich gross margins of the merchandise mix. I retired with a proud gross margin of 50.4 percent. That is nearly twice as much as it is today. These were the days of the innovative residual model that we created for selling wireless, satellite, long distance and other services for our partners. That residual model (which kept our gross margins at its historical levels) was ultimately dissolved by subsequent management after my retirement. I was in great demand by the top 10 MBA business schools in America to speak on this amazing modern success story of Tandy and RadioShack. Except for Harvard, Yale and Columbia, I had no time for the others. But it was fun telling our story to the next generation of business leaders. Also around three books were written to tell this story. I love telling the story of our amazing success in those glory years of RadioShack that I was privileged to lead. So many of my team and our 40,000 associates have rightfully taken a great deal of pride in what we experienced and accomplished. The social media is flushed with people always saying these were the best days of their professional lives. We were truly an amazing family with a deep and enthusiastic passion for RadioShack’s success. Did I make mistakes over those 12 years? Of course I did. And it can still be debated whether the tearing down of Ripley Arnold and building the new campus was one of those major mistakes. But these mistakes pale compared to what was and still is considered one of the most miraculous transformations of a retail enterprise which was heretofore stuck in the mud. And again, tremendous shareholder value was created during these glory years by my team, by my leadership and by my courageous board. And again, many of the most senior members of the retired Tandy management became very wealthy from this well-documented success. In fact, much of our success was brilliantly documented by your own newspaper.
Thanks for listening to me . I appreciate your candid and gracious response to me. Now, would you let me retire in peace! Again, all my best to you … Len