Bigger sales hit than expected

Jeremy wrote:

> The times have changed. Radio Shack has become irrelevant. Competitors
> like Lafayette Electronics closed their doors. Another competitor, Allied
> Radio, merged with Radio Shack to become "Allied Radio Shack" circa 1970,
> then the name and the famous Allied catalog disappeared. Radio Shack was,
> at one time, the only game in town in many small towns across America, but
> today's consumers can get their electronics from all sorts of retailers, not
> to mention online. Radio Shack can't make it selling small electronic
> parts, like capacitors and telephone jacks, while paying today's shopping
> mall rents.

The Allied catalog is back. Just ordered some components from them. Too
bad about Lafayette, I used to go to their store. Also Olson Electronics
was a great hobbyist store and catalog.

---

› See More: Bigger sales hit than expected

cledus wrote:

> GomJabbar wrote:
>
>>> From Forbes "People To Watch
>>
>> The Week Ahead: Feb. 13-17"
>>
>> "For Radio Shack's new Chief Executive David Edmondson, the task is
>> tough but simple: Get more people into the stores buying wireless
>> phones. The company has taken a bigger sales hit than expected from its
>> decision to dump Verizon Wireless last year in favor of Cingular as its
>> main provider of wireless service, a big profit driver."
>>
>> http://www.forbes.com/markets/commod...letowatch.html
>>
>>
>
>
> I don't understand this. I thought that RS sold Verizon services
> through the end of last year. The Cingular deal didn't pick up until
> the first of the year as far as I understood. So maybe Edmondson is
> saying that Cingular impacted their 4Q05 earnings because RS slacked
> off promoting Verizon in anticipation of getting Cingular products.
> Or is he commenting on the first 6 weeks of the new year? Or maybe he
> is fishing for a way to excuse his poor results from last year??

Their 2005 fiscal year doesn't necessarily end on December 31.

RadioShack was not doing poorly with Cingular, they switched because the
5 year deal with Verizon was over and Verizon dind't want to pay any
longer for RadioShack to sell their service. They currently feel that
it is better for them to make the pie and eat it too. They are building
new Verizon Stores like crazy. RadioShack and Verizon had a very
successfull 5 years and nothing would have been better then for
RadioShack and Verizon to renew for 10 more years but they went where
the money was and Cingular had the money.

John Navas wrote:
> [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE]
>
> In <[email protected]> on Fri, 17 Feb 2006 19:52:25 -0700,
> "Scott" <[email protected]> wrote:
>
>> "John Navas" <[email protected]> wrote in message
>> news:[email protected]...
>
>>>> You know better than the experts?
>>> Radio Shack are cellular experts? Then why are they doing so poorly?
>> Certainly more expert than you. They are doing poorly because they replaced
>> a popular seller with a poor seller.
>
> Try again. They switched to Cingular because they were doing so poorly with
> Verizon.
>

OK so RadioShack only had a 5% sales growth and lower then expected
profit from selling things with no profit like iPod. So what does this
have to do with not selling Verizon??

John Navas wrote:
> [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE]
>
> In <[email protected]> on Fri, 17 Feb 2006
> 20:03:17 -0700, "Scott" <[email protected]> wrote:
>
>> "John Navas" <[email protected]> wrote in message
>> news:[email protected]...
>>
>>> Try again. They switched to Cingular because they were doing so poorly
>>> with
>>> Verizon.
>> Thanks for proving that you didn't read the article. Sales are DOWN from
>> the Verizon days.
>>
>> Only someone without knowledge of the situation would make the statement you
>> did.
>>
>> BTW- any credible eveidence to support your claim?
>
> <http://biz.yahoo.com/fool/060112/113708679513.html?.v=1>
>
> It's been a tough year for the Shack. Almost a year ago to the day,
> the company said it was confident that it would see 20% earnings
> growth over 2004's results, but the euphoria was short-lived. Just
> two months later, the company's sales fell; it realized that it would
> miss its first-quarter forecasts, and possibly its full-year
> predictions. It's been dialing down expectations all year long.
> profits.
>
> Your turn.
>

Even though the stores were still carrying Verizon until Dec 31 they
still had to cut down on inventory to they were not stuck with it come
Jan 1. On top of that once consumers found out they were not going to
get service from RadioShack after Jan1 they didn't want to buy phones
from there in December either. Would you buy a phone from someone you
knew was closing shop next month?

cledus wrote:
> GomJabbar wrote:
>>> From Forbes "People To Watch
>> The Week Ahead: Feb. 13-17"
>>
>> "For Radio Shack's new Chief Executive David Edmondson, the task is
>> tough but simple: Get more people into the stores buying wireless
>> phones. The company has taken a bigger sales hit than expected from its
>> decision to dump Verizon Wireless last year in favor of Cingular as its
>> main provider of wireless service, a big profit driver."
>>
>> http://www.forbes.com/markets/commod...letowatch.html
>>
>>
>
>
> I don't understand this. I thought that RS sold Verizon services
> through the end of last year. The Cingular deal didn't pick up until
> the first of the year as far as I understood. So maybe Edmondson is
> saying that Cingular impacted their 4Q05 earnings because RS slacked off
> promoting Verizon in anticipation of getting Cingular products. Or is
> he commenting on the first 6 weeks of the new year? Or maybe he is
> fishing for a way to excuse his poor results from last year??

Jeremy wrote:
>
>
> I am still inclined to believe that Verizon dumped Radio Shack, because
> there were more effective alternative dales channels available. Radio Shack
> customers are typically motivated to walk into the store because they need
> some electronic component and if they end up buying wireless service, it is
> as an afterthought. The customers that are serious (i.e., "big-ticket")
> buyers are not going to be shopping at Radio Shack--they're going to be
> found at Best Buy, Circuit City or even Wal-Mart, where they will find a
> broader selection, better-known manufacturers and lower prices.
>
> Why would Verizon want their name and reputation associated with a
> second-tier retail chain like Radio Shack's?
>
>

First off RadioShack is the largest wireless retailer in the US and 2nd
in the world. RadioShack has a very fine selection of wireless phones
and often the BEST prices of anyone including Verizon Stores. They get
much better prices moving so many. Just because you didn't shop there
does not mean that serious price shoppers didn't. If you were serious
in pricing, then you would have often found better deals at RadioShack
on the phone.

Jeremy wrote:

> I am still inclined to believe that Verizon dumped Radio Shack, because
> there were more effective alternative dales channels available.

Verizon would have been happy to keep Radio Shack, but not on the terms
Radio Shack demanded. As someone else mentioned, Radio Shack thought
that they could get Verizon to buckle under by threatening to go to
Cingular, but Verizon didn't really need Radio Shack as much as Radio
Shack thought they did.

I'd never buy a phone at Radio Shack. The prices are sometimes lower
than Verizon stores, but higher than other independent resellers. Radio
Shack was kind of like those mall kiosks where they are trying to get
people to switch providers are renew contracts for a new phone, but few
customers walked in there expecting to buy a phone, unless it was some
stupendous promotion that was advertised in the newspaper.

"Chris Sweeney" <[email protected]> wrote in message
news:[email protected]...
>
>
> Jeremy wrote:
>>
>>
>> I am still inclined to believe that Verizon dumped Radio Shack, because
>> there were more effective alternative dales channels available. Radio
>> Shack
>> customers are typically motivated to walk into the store because they
>> need
>> some electronic component and if they end up buying wireless service, it
>> is
>> as an afterthought. The customers that are serious (i.e., "big-ticket")
>> buyers are not going to be shopping at Radio Shack--they're going to be
>> found at Best Buy, Circuit City or even Wal-Mart, where they will find a
>> broader selection, better-known manufacturers and lower prices.
>>
>> Why would Verizon want their name and reputation associated with a
>> second-tier retail chain like Radio Shack's?
>>
>>
>
> First off RadioShack is the largest wireless retailer in the US and 2nd
> in the world.

What is your source for this information?

"SMS" <[email protected]> wrote in message
news:[email protected]...
> Jeremy wrote:
>
>> I am still inclined to believe that Verizon dumped Radio Shack, because
>> there were more effective alternative dales channels available.
>
> Verizon would have been happy to keep Radio Shack, but not on the terms
> Radio Shack demanded. As someone else mentioned, Radio Shack thought that
> they could get Verizon to buckle under by threatening to go to Cingular,
> but Verizon didn't really need Radio Shack as much as Radio Shack thought
> they did.
>
> I'd never buy a phone at Radio Shack. The prices are sometimes lower than
> Verizon stores, but higher than other independent resellers. Radio Shack
> was kind of like those mall kiosks where they are trying to get people to
> switch providers are renew contracts for a new phone, but few customers
> walked in there expecting to buy a phone, unless it was some stupendous
> promotion that was advertised in the newspaper.

When wireless was in its infancy, Radio Shack might have been an important
sales channel, because they had the real estate in Small Town America. But
today, when wireless has already passed the critical mass point and anyone
can get a wireless phone from numerous sources, including online, Radio
Shack's impact on new wireless sign-ups no longer has the impact.

It is the same with all those independent sales agents that proliferated in
the early days of analog cellular. Where are they now? When AT&T Wireless
first initiated service in Philadelphia, we had tons of those guys, and now
many of them are gone. Same with the "A" carrier here (Metrophone, later
Cellular One, later Cingular). The independent shops that were peppered
across every highway have slowly disappeared, replaced by the kiosks that
are in every shopping center, and big box retailers like Best Buy and even
Wal Mart.

Read it with a bit more care.

In <[email protected]> on Mon, 20 Feb 2006
13:26:40 GMT, Chris Sweeney <[email protected]> wrote:

>OK so RadioShack only had a 5% sales growth and lower then expected
>profit from selling things with no profit like iPod. So what does this
>have to do with not selling Verizon??
>
>John Navas wrote:
>> [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE]
>>
>> In <[email protected]> on Fri, 17 Feb 2006
>> 20:03:17 -0700, "Scott" <[email protected]> wrote:
>>
>>> "John Navas" <[email protected]> wrote in message
>>> news:[email protected]...
>>>
>>>> Try again. They switched to Cingular because they were doing so poorly
>>>> with
>>>> Verizon.
>>> Thanks for proving that you didn't read the article. Sales are DOWN from
>>> the Verizon days.
>>>
>>> Only someone without knowledge of the situation would make the statement you
>>> did.
>>>
>>> BTW- any credible eveidence to support your claim?
>>
>> <http://biz.yahoo.com/fool/060112/113708679513.html?.v=1>
>>
>> It's been a tough year for the Shack. Almost a year ago to the day,
>> the company said it was confident that it would see 20% earnings
>> growth over 2004's results, but the euphoria was short-lived. Just
>> two months later, the company's sales fell; it realized that it would
>> miss its first-quarter forecasts, and possibly its full-year
>> predictions. It's been dialing down expectations all year long.
>> profits.
>>
>> Your turn.
>>

--
Best regards, SEE THE FAQ FOR CINGULAR WIRELESS AT
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

In fact 2005 was a bad year for Radio Shack in large part because of poor
wireless sales with Verizon, as my citations make clear, which was undoubtedly
a factor in the switch to Cingular that is part of the turnaround plan.

In <[email protected]> on Mon, 20 Feb 2006
13:24:36 GMT, Chris Sweeney <[email protected]> wrote:

>RadioShack was not doing poorly with Cingular, they switched because the
>5 year deal with Verizon was over and Verizon dind't want to pay any
>longer for RadioShack to sell their service. They currently feel that
>it is better for them to make the pie and eat it too. They are building
>new Verizon Stores like crazy. RadioShack and Verizon had a very
>successfull 5 years and nothing would have been better then for
>RadioShack and Verizon to renew for 10 more years but they went where
>the money was and Cingular had the money.
>
>John Navas wrote:
>> [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE]
>>
>> In <[email protected]> on Fri, 17 Feb 2006 19:52:25 -0700,
>> "Scott" <[email protected]> wrote:
>>
>>> "John Navas" <[email protected]> wrote in message
>>> news:[email protected]...
>>
>>>>> You know better than the experts?
>>>> Radio Shack are cellular experts? Then why are they doing so poorly?
>>> Certainly more expert than you. They are doing poorly because they replaced
>>> a popular seller with a poor seller.
>>
>> Try again. They switched to Cingular because they were doing so poorly with
>> Verizon.
>>

--
Best regards, SEE THE FAQ FOR CINGULAR WIRELESS AT
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

[POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE]

In <[email protected]> on Sat, 18 Feb 2006 08:28:29
-0800, SMS <[email protected]> wrote:

>Jeremy wrote:
>
>> I didn't know that Radio Shack still had franchisees! When I was with them,
>> the company was phasing them out, by refusing to renew their contracts as
>> they expired.
>
>About 1/3 of the stores are not company owned.

Actually 1/4.

>It's sad to see mismanagement causing such a decline in the company. The
> Cingular fiasco is just one more mis-step.

Because it ran counter to your personal agenda.

>You can't get much clearer than "The company has taken a bigger sales
>hit than expected from its decision to dump Verizon Wireless last year
>in favor of Cingular as its main provider of wireless service, a big
>profit driver."

Radio Shack actually switched from Verizon to Cingular because of bad Verizon
sales in 2005.

>I wonder if there is an exclusivity clause or an escape clause in the
>deal between the two companies. Radio Shack is going to have to at least
>add Verizon, even if they are obligated to carry Cingular for ten years,
>but now Verizon will play hardball on the terms.

I'm not holding my breath.

--
Best regards, SEE THE FAQ FOR CINGULAR WIRELESS AT
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

[POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE]

In <[email protected]> on Sat, 18 Feb 2006
17:26:42 GMT, cledus <[email protected]> wrote:

>GomJabbar wrote:
>>>From Forbes "People To Watch
>> The Week Ahead: Feb. 13-17"
>>
>> "For Radio Shack's new Chief Executive David Edmondson, the task is
>> tough but simple: Get more people into the stores buying wireless
>> phones. The company has taken a bigger sales hit than expected from its
>> decision to dump Verizon Wireless last year in favor of Cingular as its
>> main provider of wireless service, a big profit driver."
>>
>> http://www.forbes.com/markets/commod...letowatch.html
>>
>
>
>I don't understand this. I thought that RS sold Verizon services
>through the end of last year. The Cingular deal didn't pick up until
>the first of the year as far as I understood. So maybe Edmondson is
>saying that Cingular impacted their 4Q05 earnings because RS slacked off
>promoting Verizon in anticipation of getting Cingular products. ...

Yep.

--
Best regards, SEE THE FAQ FOR CINGULAR WIRELESS AT
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

[POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE]

In <gBKJf.1055$p13.852@trnddc08> on Sat, 18 Feb 2006 19:30:20 GMT, "Jeremy"
<[email protected]> wrote:

>I wasn't even aware that Verizon (or any other wireless service provider,
>for that matter) was so powerful a profit center for Radio Shack. ...

It is.

--
Best regards, SEE THE FAQ FOR CINGULAR WIRELESS AT
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

[POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE]

In <nXkKf.5185$HU.2616@trnddc04> on Mon, 20 Feb 2006 15:08:03 GMT, "Jeremy"
<[email protected]> wrote:

>> First off RadioShack is the largest wireless retailer in the US and 2nd
>> in the world.
>
>What is your source for this information?

Published research reports.

--
Best regards, SEE THE FAQ FOR CINGULAR WIRELESS AT
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>