Walking through Sundance Square at 10 o’clock last Wednesday night my eyes were drawn to the dancing lights of a store window.
The lights caught me off guard, as if they were part of spaceship that just dropped to earth. I felt as though E.T. might step out the door and into the cool night air.
But it was no extraterrestrial orb that stood in front of me; it was the new RadioShack concept store. Information flickered across the screen of a television monitor in the store window announcing a film exhibit from the archives of the late Dallas Times Herald.
Inside the store, everything looked shiny and new. Inviting.
The irony was unmistakable. RadioShack’s concept store is the latest symbol of a company in financial difficulty trying to regain its footing and reposition itself in the marketplace. I recalled when the Dallas Times Herald tried in vain to do the same thing but ultimately lost out to an unfriendly set of trends in the newspaper industry – and to its fiercest competitor, the Dallas Morning News.
The seeds of ultimately fatal damage to the Times Herald had been sowed long before, by decades of poor management decisions and the nimbler competency of the Morning News. Under new leadership, the Times Herald fought valiantly to stay alive but the changes it made were too little, too late.
The day before I paused in front of its flashy new store, RadioShack had announced dismal fourth quarter results. It lost $191.4 million and its stock nose-dived to $2.25 a share. By the market’s final bell on March 6, the price had plunged to $2.04.
The company also announced the planned closing of 1,100 stores.
CEO Joe Magnacca said that perhaps his team had tried to make too many changes, too fast. As he has done since he took control in February 2013, Magnacca faced the music head-on, admitted his disappointment and confessed to what appeared to be some failed executions in his recovery plan.
Lets face it. RadioShack’s financial difficulties are not Magnacca’s doing or his staff’s. In my mind, the company’s problems started when then-CEO Len Roberts and his crew built the extravagant downtown Fort Worth campus on the banks of the Trinity River. They blew that deal every which way, starting with the ham-handed displacement of the Ripley Arnold public housing project that had stood on the site for decades.
The city exacerbated the problems by granting outrageously generous tax incentives with little or no consideration for the long-term viability of either RadioShack or its planned corporate headquarters. It wasn’t long before RadioShack sold the property to a German company and leased back the space it had been so eager to build.
At a time when Roberts and his cohorts should have been developing products and a forward-looking business plan, they were instead obsessed with developing bricks and mortar. So RadioShack erected a Taj Mahal and entered the highly competitive phone business, among other things. Eventually, the Roberts team was largely dismantled and RadioShack went through a string of CEOs. None understood what I believe was once a RadioShack core competency.
What was lost was the company’s past practice of developing products – proprietary products. Few among us, except former CEO John Roach and his team, probably recall the TRS-80 laptop, which in its day was a revolutionary product developed by RadioShack. Innovation and product development were hallmarks of the early years of RadioShack’s history. The TRS-80 Color Computer, as it was called, was also referred to as a “home” computer and was looked upon as a major achievement in the early Roach years. The color model was developed in 1980 after a partnership between RadioShack and Motorola.
The crucial element of this stroll down memory lane: If you wanted a TRS 80, you bought it from RadioShack. There were other proprietary products as well.
I am still cheering for Magnacca and his team. He’s an innovative leader and a straight shooter. You cannot land or keep a job such as this without a ego, but his is indiscernible.
I saw hope, small slices of sunshine peeking through the dark clouds, in Magnacca’s explanation of the company’s failures and challenges as he talked with stock analysts. He said he remains optimistic and that Radio Shack has new products in development, both in-house and with outside vendors. That’s the old RadioShack way, the one that worked.
The finances are bad but amid the losses, glimmering signs of life offer more hope than we’ve seen in years. New products on the way. Inviting new concept stores that shout, “Hey, come on in; its fun in here!”
The looming question: Can the cavalry arrive in time?
Richard Connor is CEO of the Business Press’ parent company, DRC Media. Contact him at email@example.com
(This column has been updated to eliminate an error included in a previous version)