November 19, 2012
With so much seemingly going wrong with RadioShack
) , it may be hard to tell exactly where to focus your attention when considering buying or selling. Should you look at margins, sales, store counts, or something completely different?
To help answer this question, check out our new premium report on RadioShack. For a taste of what is offered inside the report, read the excerpt below that discusses what to watch for RadioShack.
Three areas to watch
- Future leadership
With former CEO Jim Gooch's departure, the company seems directionless until a new CEO is in place. Jim Gooch's past roles included time at Kmart and Sears in mainly financial positions. He was not a customer service or experience expert. The new CEO's past experience and performance will give investors a big clue as to whether the board is committed to changing RadioShack's path with an improved customer experience — or whether it will continue to focus on a numbers-driven approach to retail.
Interim CEO Dorvin Lively currently leads the company. He was brought in as CFO in 2011 from Ace Hardware, where he spent three years, and also worked at Maidenform and Toys R Us. His financial background could help optimize RadioShack's operations, but he lacks the customer-oriented experience needed to lead RadioShack for the long term, so the board of directors should rapidly find the right replacement.
The board itself is composed of executives from a wide range of industries. Most recent additions to the board are Julie Dobson, who has plenty of experience in telecommunications, and Robert Abernathy, head of Kimberly-Clark's consumer products for North America, both of whom joined in 2011. Other board members include the former CEO of Popeyes Chicken & Biscuits, the CEO of a public pawn-shop chain, and the CEO of a publishing company.
- Target Mobile performance
The kiosks inside Target (NYSE: TGT ) account for over 20% of RadioShack's stores while the older-format stores continue to dwindle in number. While revenue increases with these kiosks, margins and profits fall. RadioShack must achieve profitability with the kiosks, otherwise Target Mobile will be another failed attempt like those seen with PointMobl, Sam's Club, and Blockbuster.
- International expansion
The company has ambitious plans for Mexico, striving to roughly double its store count in the country in the next four years. With new deals for stores in Asia, RadioShack could enter markets that are less dominated by its domestic competitors. These stores will also need to be profitable, and effectively deliver an experience that will entice repeat customers — something that many may argue is lacking in the U.S. But if international expansion ruins the company's focus on its major U.S. market, it could lose more domestically than it gains internationally.
More in-depth analysis available
That was a sample of what is available in our thorough premium report on RadioShack. As RadioShack faces a different store mix, new management, and the chance of a collapsing business, our report breaks down the most pertinent information for investors. It is completed with updates on the latest news and analysis for RadioShack. For your copy, click here now.