Reuters reports that Radio Shack CEO James Gooch stepped down from his position on Wednesday. Chief Financial Officer Dorvin Lively, who joined the company as CFO back in 2006, will be the acting CEO until the board finds a successor.
Shares of the aging electronic chain have fallen more than 80-percent since Gooch took the reins in May 2011, and were down 0.8-percent at $2.54 in morning trading. The company's operating margins have diminished to 3.5-percent in 2011 from 8.7-percent in 2009, and could decline to -0.1-percent in 2012. That said, it was obviously time for a change.
"The board decided that the timing was right," said company spokesman Eric Bruner. "Moving forward with the decision sooner rather than later will help establish the right leadership to address the company's challenges."
At one time, RadioShack was a quality name brand that grew popular in the vacuum tube era. While the store offers plenty of cool gadgets and components for fixing electronics, a decline in business has forced the company to shift its focus on selling low-margin phone calling plans and smartphones such as the Apple iPhone.
But RadioShack is facing problems on two fronts. First, its name conjures up images from another era (like Singer, etc). "Radio is a concept from a hundred years ago, and a shack is a place that essentially homeless people lie in," Michael Pachter of Wedbush Securities said, adding that the company also faces a demographic challenge, as the younger crowd is not replacing the older customers.
Like Target and Best Buy, RadioShack is also facing stiff competition from the likes of Walmart and online retail giant Amazon. It's also having a difficult time in an evolving market. Despite focusing on smartphones, RadioShack isn't changing quickly enough, and seemingly has too narrow of a focus in its present state.
"There is no sign of fundamental improvement," said Morris Ajzenman of Griffin Securities. "I am absolutely not surprised (at Gooch's departure)."
RadioShack's board is now conducting a search for Gooch's replacement. This puts the company in a state of transition until a new CEO is found. The new leader will need a "unique strategic vision" to bring RadioShack into a new era full of smartphones, tablets, and other new form factors.
"(The future) depends on who they bring in and what vision they bring in for the company to turn this cruise ship around. It is no longer cruising, it is sinking," Ajzenman added.
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the main reason why they aren't doing well is because of the overpriced electronics they sell....here is an example...HDMI cable is $25 at Radio Shack, while Fry's sells the same cable with the same specs and maybe a foot or two longer for just a little over $5.....this is the main reason why i don't buy electronic components or parts from Radio Shack anymore....Fry's has everything I could find in a Radio Shack and more, also way better pricesReply
Reminds me of AMD. Just sayin'.Reply
The end of the world is near. Soon, all major corporations will be CEO-less...Reply
Yep, overpriced commercial junk !!!Reply
Radio Shack started out with teaching electronics and kept with the DIYer in mind.
Every year the keep cutting back on the variety of parts and charge 4 to 10 times what they are worth as it is not even a convenience to go there to buy from them anymore. :(
They have been floundering for a long time. I used to love going into a Radio Shack and looking around at all the neat stuff. Used to.Reply
As an employee of a shack this is really sad. I know Radioshack hasn't been in the best financial position. But there are locations that are doing fairly well. I know everyone complains about our pricing, even I do. But with the customer numbers that we have coming, the store has to do a huge markup to have enough to profit to hold the store. Our prices aren't too bad looking at other places around our particular store though. Fry's is always a winner, but comparing us to the nearest Best Buys, and even a privately owned electronics hobby store is a joke. I frequently send customers there because I know they are gonna come back. Cables wise, HDMI is ridiculous, but compared to Best Buy, we don't even touch their tag of their most expensive 500 dollar 12 foot cable. Most other small things that customers buy frequently, we have the same or a bit lower price for a much better quality, yet people are still lead to believe that other places are cheaper. I'm not sure where thats coming from.Reply
Either way, stores specifically need to change. They changed the rules where they pay us pennies for our hard work, they just need to find people that are dedicated, and don't just take it as a place to get money. Our store we try REALLY hard to make it fun. Customers pick up on that and are happy to be helped by us. We frequently have our geeks drop some funny lines on their way out of the store, and they always come back, because even if we don't sell them anything, we helped, and they had fun, so next time they need something quick, they will come buy it from us. We're just down to earth people that aren't taught to spoon feed you that our products are amazing and you should buy them. We understand our standing, and make recommendations from there. I think thats what Radioshack needs to start doing. Right now the customer base is really fairly pissed off. If you get customers to leave happy now even empty handed, when they need something later, they will be glad to come back and actually buy something.
-Best store in our district, and frequently get appreciation letters from our customers sent to corporate. They never take much notice though.....
Just my 2 cents....
i used to shop at radio shack a lot too.. but the stores are so limited as far as selection that its pretty much a niche store any more.. you can buy phones pretty much any where and .. you can even get an iphone through virgin mobile with out a contract on a much cheaper plan .. my point is i actually wanted to consider buying stuff from radio shack even looked online at there web site looking for deals on pc parts and there selection was highly over priced and dated .. how a company like that plans to be embraced by the general population ... is beyond me. they lack innovation .. even giant chains like best buy have painful issues and they are in a much better position to compete with places like radio shack how ever there is a frys electronics near where i live and i would rather go to them any day of the week then go to best buy or radio shack because they have a much better selection and better prices .. also its one of the few places you can go and buy pc parts that are not at 20 to 40 percent markup like some of the smaller shops try and pull.Reply
Funny how things come eventually back to do you in.Reply
In the late 80 their "Incredible Universe" stores forced and bullied countless computer shops out of business.
Now the geeks have turned the table and, via Amazon, Newegg and friends, Radio Shack may be on it's way out. Not much of a loss.
I have no idea how many CK-722, 2N3904/2N3906, 2N2222 and other transistors and discrete components I bought there in my teens; hundreds I'm sure. Somewhere I may still have a bunch of Forrest Mimms III project books. Jim Gach, if you're out there, I wish you well (he was the local store's manager, and let me help them stock parts a couple of weekends; I was paid in parts, so it was a cool deal for a 15-yr old). The free battery cards have long since mouldered, but I probably still have a couple of their flashlights too, often gotten free from coupons in the Sunday paper around Christmas. Getting their new catalog was a summer highlight.Reply
I know things change, but I will miss them if they go.