"RadioShack Ann Arbor" by Nicholas Eckhart is marked with CC BY-NC-SA 2.0.
It makes sense that a company named for a device that many Gen Zers have never heard of has slipped off the map, but not many people know that before it declared bankruptcy in 2017 for the second time, RadioShack was almost nearing its 100th birthday.
Radio Shack (yes, it was two separate words until much later) was founded in Boston in 1921 by two brothers, Theodore and Milton Deutschmann. They sold both ship radios and radios for amateur gadget enthusiasts, so it made sense that they named their company for the “radio shacks” where radios were housed on naval vessels.
Despite its rapid growth in the following decades, partly aided by its foray into music, RadioShack had its first brush with bankruptcy in the 60s. Charles Tandy, a leather retailer, bailed out the company by buying it for $300,000.
As CB radios reached the height of their popularity in the 1970s, so did RadioShack. In fact, by that point, they were opening three stores a day. But neither trend could last forever. As the demand for CB radios waned, RadioShack started selling the TRS-80, one of the first personal computers widely available to consumers. It even outsold Apple at first, but that trend couldn’t continue either, as Apple and IBM started selling more powerful computers and RadioShack couldn’t keep up. In the 80s, they added cell phones and satellite TVs to their shelves in an attempt to move with the times.
And here’s where RadioShack’s focus on cell phone sales ended up costing them dearly. From BuzzFeed:
“As the cell phone market boomed, RadioShack concentrated on selling not only the actual cell phone but also service plans and accessories — even negotiating deals with cell phone carriers to receive percentages of customers' monthly fees. By 2011, cell-related sales accounted for 51% of RadioShack's $4.4 billion in sales.
Due to their success, RadioShack stopped carrying legacy products, and its staff was trained primarily to sell cell phones. However, carriers soon began opening their own retail stores. Between 2000 and 2015, RadioShack's marketing lost focus and management saw constant shifts. This resulted in six different CEOs between 2006 and 2016 and in different slogans such as, "You've got questions, we've got answers," and, "Radio Shack: Let's Play," which confused and failed to connect with customers. On top of this, stores like Best Buy and Walmart began to pop up. They offered lower prices and e-commerce options, pushing RadioShack out of its niche.”
Things continued to get worse for RadioShack from there, as new online competitors like Amazon and Ebay undercut prices, and a $250 million loan from Salus prevented the company from closing stores. These factors contributed to RadioShack losing $1.1 million per day, according to a quarterly report from October 2014.
On Feb. 3, 2015, RadioShack defaulted on its loan from Salus, and two days later, it filed for Chapter 11 bankruptcy. A 2015 partnership with Sprint Mobile in an attempt to capitalize on commissions from their sales did not go as planned. Later that year, General Wireless bought RadioShack for $26.2 million, but the company was forced to file for bankruptcy again just two years later, in 2017.
In 2020, amid declining retail profits across industries due to the pandemic, entrepreneurs Alex Mehr and Tai Lopez (yes, the garage-Lamborghini guy) invested in the now twice-bankrupt chain, this time online. Indeed, you can go to radioshack.com and purchase everything from drones to robotics kits to t-shirts with the RadioShack logo on them. Luckily for RadioShack, the 80s became cool again.
But the future of the company remains murky. “It’s a very thin line between being iconic and being dead,” Robert Passikoff, founder and president of Brand Keys Inc., told ABC News of the company’s online shift. “Being iconic a lot of the time just means people have a memory of it. I’m not sure that just remembering something is leverageable enough to be able to convert something into success.”
