SILVER SPRING, Md. (AP) — RadioShack, a mall staple for decades, has once again been pulled from the brink of death.
It’s the hottest name in the basket of brands that entrepreneur investors Alex Mehr and Tai Lopez have picked up since the coronavirus pandemic toppled the US retail sector and sent a number of chains into protective custody. of bankruptcy. These brands so far include Pier1, Dressbarn and Modell’s.
Mehr and Lopez plan to make RadioShack competitive again, this time online, rather than on street corners or in malls. However, unlike RadioShack’s glory years, this is Amazon’s AMZN,
The big question is, what is the value of the RadioShack brand when the prized target audience of Millennials or Gen Zers has probably never owned a radio, let alone walked into a store?
“It’s a very thin line between being iconic and being dead,” said Robert Passikoff, founder and president of Brand Keys Inc., a marketing and research consultancy. “Being iconic most of the time just means people have a memory of it. I’m not sure that just remembering something is effective enough to convert something into a success.
“ After store redesigns and other changes failed to attract customers, the Fort Worth, Texas chain of stores filed for Chapter 11 bankruptcy in 2015 and later filed for bankruptcy. again two years later. ”
Success is something that has been in RadioShack’s rearview mirror for some time. The company, which would celebrate its 100th anniversary in 2021, seemed to be at the top of the tech world in the pre-personal computing era of the late 1970s and early 1980s, when kids and hobbyists would go buy radios, walkie-talkies and all the parts to repair them, or even build them themselves.
Somewhere along the way, “The Shack” got lost. Unable to capitalize on the PC boom that began in the mid-1980s, it also found itself largely outside the portable device revolution of the 1980s and drifting into insignificance. It posted its last profit in 2011. After store redesigns and other changes failed to attract customers, the Fort Worth, Texas-based company filed for bankruptcy protection under from chapter 11 in 2015, and then again two years later.
Mehr and Lopez have no intention of rebuilding RadioShack’s physical empire. But they say there is a path to profitability, and it all starts with the name.
“We bought the raw material to build a big business,” Mehr said. “The brand signifies trust. And the brand is very, very strong. I have quantifiable data that the brand is very strong.
Mehr said REV’s formula for measuring a brand’s public opinion differs significantly from how other experts gauge these things, including their own polls and analyzes of how the company might perform in a specific “ecosystem”.
The plan, in short, is to create a massive online marketplace on top of the RadioShack brand. Trust in this name will bring consumers to the site, where the quality and variety of goods will dictate whether or not shoppers click the “Buy” button, they say.
Since its inception in 2019, REV has been searching for other names that could once be described as “household”. This transformed Pier1, Dressbarn and Modell’s into the first online businesses.
Other bankrupt retailers have found a second life online. Overhead costs are low and there are people who stay loyal to the brand even after the store lights go out. But these are usually very small cases. American Apparel, which went bankrupt and closed all of its stores a few years ago, now sells hoodies and sweatpants online. Toys R Us, which closed two years ago, has opened a few small stores and has a website.
However, the Toys R Us site redirects those who want toys to Amazon.com.
REV says its much lighter RadioShack will sell from its own website and an Amazon storefront. RadioShack was the place to go for batteries, phone chargers and headphones. These are products that Amazon sells under its own brand in large quantities.
And therein lies REV’s Sisyphus Challenge. Megachains like Walmart WMT,
and target TGT,
may have slowed Amazon’s encroachment, but Amazon is the ultimate disruptor. It has disrupted industries from technology and groceries to global shipping.
If Amazon is the biggest threat to some of America’s biggest companies, what are the prospects for a relic of the 1980s?
“Amazon is the Death Star,” said Allen Adamson, co-founder of marketing strategy firm Metaforce. “They have everything and it’s easy and quick. No need to go to your RadioShack corner to find anything, or even RadioShack online.
Still, Mehr doesn’t see Amazon as a competitor. Rather, he said, it’s another channel where RadioShack can sell its wares.
“It’s like a big mall with lots of traffic,” Mehr said. “So I see Amazon as a partner, and I’ve done that in other brands as well. So that’s another distribution channel for us.
REV purchased RadioShack from General Wireless Operations Inc. for an undisclosed amount this year. The former owners retained a minority stake, betting on the social media marketing expertise of Mehr and Lopez.
The new owners say they hope to open RadioShack.com by the end of the month. About 400 RadioShack locations remain open, but operate independently of the REV-owned parent company.