When Woolworth went out of business and bought its one-way ticket to the great strip mall in the sky, I remember the great outcry from people who reminisced about the good old days of grilled cheese sandwiches and nickel Cherry Cokes at the lunch counter and shopping for notions.
Except when you asked these same people when was the last time they had eaten a grilled cheese sandwich or shopped for notions at Woolworths, they stared blankly and searched their memories to no avail.
We are now in the same mourning period for Radio Shack following its bankruptcy filing last Thursday. Certainly it was the retail demise with the longest build-up and least amount of surprise since the General Store closed in Dodge City.
Equal parts sad, appropriate, unforgiveable and tragic, Radio Shack’s bankruptcy has been forecast for years, despite new management, a handful of new concept stores and a Super Bowl ad that was every bit as dumb and ill-advised as Pete Carroll’s play calling.
In this Robin Report space in 2013, I laid out all the reasons why this week’s actions were inevitable and to reprise it now is just throwing salt in the wound. Suffice it to say, the store had become irrelevant to today’s shoppers and was too far gone to be rescued.
Now comes the picking over the bones. Standard General, a hedge fund that got a taste of retailing with American Apparel and seemed to like it, bought into the Shack with a couple of loans and now stands first in line to pick up maybe half of the stores. Getting first dibs by lowball financing is a tactic our old friend fast Eddie Lampert honed well at Kmart. Learn from the master. These guys will get their money out of this thing no matter what happens, don’t you worry your pretty little heads.
Some number of these stores are going to be farmed out to Sprint to become giant phone booths for mobile services. (Wonder if they’ve already trademarked Sprint Shack?) RS stores as cell phone centers was a strategy the company itself tried on and off for years, at first finding great success with it and then slowly contributing to its demise.
Why Sprint? The smallest of the major mobile phone companies in the US, why Sprint thinks it can make this plan work is beyond me. There have been ongoing urban retail legends that Amazon was going to take over a bunch of Shack locations and convert them into local pick-up spots and mini-DCs. This would be particularly poignant as that is what Radio Shack itself should have done 10 years ago when it missed the online boat by a nautical mile.
Today, it begs the question of why a shopper would want to order something on Amazon and then go someplace to pick it up. Isn’t that the distribution model Amazon is basically seeking to replace? Isn’t going someplace to pick up something called…well, a store?
Before not too long, there will be half the Radio Shacks there are now…and half the workers working, half the suppliers supplying and half the leasing companies leasing.
And when it’s all over, there will be nothing…or virtually nothing. When all the stores are gone, somebody will buy the Radio Shack name and set up an online site selling batteries, cables, small branded consumer electronics and the latest digital doodad.
And that will be the saddest – and most ironic – part of all.