In its new life, the surviving Shacks plan to drop the unprofitable big-name gadgets — like cameras, laptops and tablets, which shoppers increasingly scooped up online — and rebrand itself as "the premier community destination for consumer electronics," a national bodega of batteries and earbuds.
Think of the new Shack like the modern equivalent of a small-town corner store: Instead of milk and medicine, it will have cellphone chargers, headphones and all the other little easily forgotten doodads that keep our Web-connected lives running. (One of the Shack's biggest bestsellers: Hearing-aid batteries.)
The company expects these little tech outposts to take off in small-town America, where online shopping and quick deliveries are not pervasive, but where gadgets remain just as much a part of life. The best-performing Shack outlets, leaders said, weren't often in busy cities or high-rent shopping centers, but in slower areas and strip malls, where competition was low and RadioShack was perhaps the only gadget game in town.
“The parts of the business that you think are unsexy are the ones that are doing great,” Soohyung Kim, Standard General's managing partner, told the New York Times. “And the parts that you’d think are cool, the smartphones and the prime [retail] locations — horrendous.”
But not all market-watchers are holding their breath for the Shack's revival to health. The cannibalization of RadioShack's main business model by online shopping — and the rise of smartphones as a replacement for GPS units, music players and the other gizmos that once filled the Shack's shelves — has not changed, they argue, and won't be diverted by the new unveiling of a convenience mart.
"The fact that they have a new lease on life does not change the competitive dynamics here," said Anthony Chukumba, a senior research analyst with BB&T Capital Markets. "And to me it does not change the so many reasons that led them to going bankrupt in the first place."
Only 7,500 of RadioShack’s 27,000 jobs will survive in the thinned-down chain's surviving stores, most of which will share space with cellphone carrier Sprint. Salus, which sought to liquidate the Shack, still owns some of the company's most critical pieces, including customer data and the RadioShack name, meaning the new creature may have to start from square one with an entirely untested brand.
It is unclear what the stores Standard General keeps open will be called. Standard General representatives on Tuesday declined to comment. But RadioShack has proclaimed its resurrection across social media, saying the store looks "forward to continuing the journey":
The retailer has championed other Shack-is-back turnaround efforts before, but they've always been "too little, too late,” as Will Frohnhoefer, an equity research analyst at BTIG, told the Washington Post. “They had multiple years — a decade of decline — to try to reverse things, and they didn't seem to come up with a coordinated strategy until very late in the game.”
Perhaps the Shack has a slim chance as a gadget supplier in a world where electronics are increasingly complicated and fancy cords, like "the world's most advanced charging cable," can raise half a million dollars from crowdfunding sites. But if the effort proves unsuccessful, its new leaders could once again seek to put the Shack out of its misery, and some analysts expect the illnesses of the past will once again plague Shack's shot at a second life.
"Even if you live in podunk U.S.A.," Chukumba said, "you still have the Internet."