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this video is 100% a result of viewer
requests the first time I saw the topic
it was mentioned in the comments and I
passed over it I figured I would cover
it down the line because there were
other topics I wanted to get to sooner
then the request kept coming in to a
degree where I figured there must be
some things I'm not aware of and there
must be a reason this is so heavily
requested so I decided to investigate
and I'll say right now it's shocking
that this decline didn't knock them out
faster they're like a boxer that's just
been taking hits from the first round
and oddly enough they're still standing
but the knockout punch can't be far I
was quickly fascinated by their Decline
and honestly this was the first time in
my life I'd ever had any interest in the
company known as Radio Shack the company
was started all the way back in 1921 by
two brothers in Boston and as the name
implies they sold radio equipment it had
the same name as today but back then
Radio Shack was two words today it
officially seems to be one word though
it's still written as two in a lot of
places like if I search Radio Shack and
Google their website result comes up as
two words in 1995 they changed their
logo from two words to one and I suppose
that led to the slight name alteration
of the entire company but it all started
in the early 20s and everything went
well for the next 40 years the company
expanded and built some large store
locations but by the early 1960s Radio
Shack was already struggling they were
selling radios just fine but their costs
were outweighing their sales and they
just couldn't make the business work
properly so a man named Charles Tandy
who was strangely the owner of a leather
company bought Radio Shack and started
making changes the biggest change was
proba probably switching to smaller
store locations the thinking behind this
is that they would see which products
they sell best and only sell them the
products that weren't selling as well
were just taking up space without
bringing them much benefit and it seemed
to be effective this along with many
other changes saved the store and put
them in a good position once again also
in the 1970s CB radios became a big fad
and not surprisingly this was a good
thing for Radio Shack Charles Tandy
passed away in 19 78 but Radio Shack was
still owned by the Tandy company a Tandy
company in the 1990s the decision was
made to focus a little less on radio and
electronic parts and a little more on
popular electronic products they went
pretty heavily into cellphone sales it
was right around the beginning of the
2000s when Radio Shacks started to
decline once again and they never
recovered from this one this decline is
the same one that they're experiencing
today which is what what's so shocking
they've been on a steady decline for
over 15 years and somehow Still Standing
have you ever played a game of Monopoly
where it's clear you've lost but you
just refuse to let it end the opponent
has hotels all over the board and all
you have are a few houses and the two
cheap purple properties you keep landing
on bad spots and mortgaging things to
pay it off maybe you get a good chance
card or pass go and get $200 and that
keeps you in a little bit longer you
make some crazy trades to pay off some
debts before you know it you've been
playing for half an hour and all you've
been doing is making little moves just
to stay alive you haven't done anything
that would help you come back and win
this is what Radio Shack has been doing
they made deals with cell phone
companies set up Kias and Target
rebranded themselves as the shack they
did so many different things over this
period but none of it was going to turn
things around all it did was benefit
them a little bit immediately but most
of it ended up hurting them in the long
term if you were trying to pinpoint a
year where things went really bad for
them I'd say 2012 is a good place this
is the year they went into negative
profits $72 million profit in 2011 $139
million loss in 2012 and a $400 million
loss the year after between then and now
everything spiraled out of control soon
after they were taken off the New York
Stock Exchange because their stock price
went really low less than a dollar and
they weren't trading enough shares to
meet the requirements to be on the
exchange their employees tried suing
them for promoting their 401ks that were
tied up in Radio Shack stock the whole
thing was a complete mess here's
something else that stands out I showed
you the negative profits starting in
2012 well negative profits means they're
not making money to run their business
so they have to seek money from
elsewhere commonly a loan they were able
to get a loan from a place called Salis
but $250 million loan but as a condition
for this loan Radio Shack agreed that
they wouldn't be allowed to close more
than2 200 stores in a single year
without Salis approving well when
companies are losing money the strategy
is usually to identify the stores that
are losing the most money and close them
down it makes perfect sense close those
stores and you no longer have the losses
from them and theoretically the overall
profit should instantly start to
increase we see it all the time so when
Radio Shack knew they were in a position
where they would likely have to start
closing stores it wasn't a great idea to
give Salis this power that would prevent
them from doing it but also remember
Radio Shack was in a terrible position
and needed this money to maintain
operations they may have gone out of
business if they hadn't gotten this loan
they were backed into a corner so they
agreed to these conditions fast forward
a little bit radio Sheek is losing money
like crazy and desperately wants to
start closing stores Salis doesn't let
them Salis doesn't think this is the
right way to go but Radio Shack has
reason to believe that they have too
many locations and too close to each
other and they're basically stealing
customers from themselves so now we have
Radio Shack severely struggling and
Salis won't even let them downsize with
dignity by the way if you had any doubt
about how much Radio Shack was
struggling I hope it's clear now in the
beginning of 2015 Radio Shack declared
bankruptcy which now enabled them to
start closing stores again this company
is not at all I mean it it traded for 9
cents a share in the OTC pink sheets we
already knew this was going to happen
they immediately announced the closure
of nearly 1,800 stores right after the
bankruptcy a company called Standard
General bought Radio Shack though I
don't see why they would want it as if
all this wasn't enough radio Sheek filed
bankruptcy again earlier this year it's
closing 1,000 more stores and now only
70 locations remain open they may Linger
on with a few locations but it's
effectively out of most of our lives so
the question remains where did they go
wrong everything spiraled out of control
over the past few years but how did they
even get in that position there's three
things I think most contributed to all
of this and before you say it I'm aware
of the management issues there was a
10-year period where they change CEOs
every year or two which certainly isn't
a great sign but to me it's more of a
sympt than a cause though eventually it
does become a cause as well but I'm
leaving it off my top three
list a big contributor to all this was
ready for it the internet shocking right
but the internet hurt Radio Shack more
than most companies for multiple reasons
one is that they were late to the party
almost every store sells their products
online any retailer you can think of go
to their website and they probably sell
stuff there it's been that way for about
20 years now but for Radio Shack it's
been that way for about 10 years meaning
they missed out on 10 years of internet
sales and right about that time when
this became a big thing and Radio Shack
ignored it is right about when their
trouble started and think about a lot of
the stuff Radio Shack sells electronic
parts resistors wires fuses the kind of
stuff you can easily order online and
don't really need to see it in person
before you buy it these kinds of
products are perfect for online sales
and on top of that Radio Shack is known
to be sort of small well if you need a
specific part what are the chances Radio
Shack will have it who knows they're
small so they might not but what are the
chances the internet will have it nearly
100% Radio Shack is the type of store
where you run in grab what you need and
leave I remember a while ago I walked
into a Radio Shack just to look around I
expected it to be sort of like a Best
Buy I expected to see the new
televisions cameras computers DVDs maybe
a video game demo all the fun stuff you
see when you walk into an electronic
store but all I found there were
electronic parts some alarm clocks a few
cell phones which were fake by the way I
mean the screen was just a picture glued
to it there was nothing interesting to
look at it's not that type of store I'd
say like Diet Best Buy or low calorie
Best Buy there's really nothing gained
by going there and besides being able to
get it a little quicker I don't see why
someone would buy something there as
opposed to online the internet seems
like a perfect outlet for really most
retailers but Radio Shack especially yet
they didn't do it they let the
opportunity pass them for years and they
suffered from it reason 2 is a bit of a
continuation from reason 1 but it's the
products they sell let's go to the Radio
Shack website an amfm stereo headset but
luckily there's a big deal going on and
it's only
$48 here's some incredible Flips
headphones 30% off which brings them
down to
$140 are there people buying incredible
Flips headphones from Radio Shack when
they cost about the same as beats think
in your head right now how much this
might cost remember it's 30% off the
answer
$33 so you might want to go rush to the
website and get it I'm just looking at
the homepage this is what came up when I
clicked on their site is it just me or
is this a terrible selection of products
and overpriced are there that many
people tinkering with radios and
electronics to Merit such an emphasis on
these
products I don't really know what radio
checks guess that's the problem I mean
electronics parts I go to the best bu
site I get computers HD TVs video games
people complain about Best Buy but from
what I can tell they're golden compared
to Radio Shack Radio Shack filed for
bankruptcy last week La who's been in a
Radio Shack this month okay that's
why reason three goes along with reason
two which went with reason one reason
three is their cell phone involvement in
the 1990s they got into the business of
selling cell phones and boy was this a
bad idea but not at first so cell phones
were blowing up it sounds strange saying
getting involved in cell phones in the
99s was a bad idea but it was a bad idea
in the way they did it they were only
involved in selling them in the 9s it
was harder to get cell phones than it is
today today you can't walk through a
mall without being offered a cell phone
contract but back then you had to kind
of know where to go and a place many
people knew where to go was Radio Shack
it was good at first so they really went
all in on it and started ignoring the
rest of their business which maybe why
that part of their business is so bad
today all of their staff was occupied by
trying to sell these phones and spending
a tremendous amount of time filing
paperwork once the sale was made they
neglected the customers looking to
purchase other products then after a few
years all the service providers open
their own stores Verizon Sprint AT&T
whoever your provider is chances are you
bought it from their store not a Radio
Shack Radio Shack pushed aside the type
of products that they were once known
for to sell these cell phones and now
people are getting their cell phones
elsewhere what became essentially half
their business became pointless and as
we saw in our first two reasons the
other half of their business is also
sort of pointless as well when we
combine all this we have to ask
ourselves does radio Sheek sell anything
that I wouldn't rather buy somewhere
else the answer for me is no the
electronic parts I would sooner go to
Amazon the cell phones I would sooner go
to the provider and most else of what
they sell I don't even want maybe I
would buy some batteries from them if
the sale was good but it's hard to
maintain a business based on that how
could they go what did they do with all
the money I spent on AAA batteries 9
years ago like I said as of today Radio
Shack is pretty much done they lasted
nearly 100 years and who knows May
technically hit that 100-year Mark a
20-year decline that involved two
bankruptcies not to mention the
financial trouble they had over 50 years
ago yet they're still standing but for
everyone watching this they might as
well be gone unless you're one of the
lucky few to live near one of those 70
locations they're out of your life
altogether I can't say I have any
positive memories of the company in fact
I only really have that one and it was
rather disappointing but I'm sure that's
because I'm just not old enough to have
experienced the company at its peak and
I'm sure this is why I initially passed
over this topic my experience was well
after this massive decline began but if
you had the opportunity to experience
them in one of their better years let me
know what it was like or if you experien
them in one of their bad years
especially toward the end or even today
I'd like to hear that too I'd like to
hear what you have to say thank you for
watching
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