Radioshack was one of several major companies that went bankrupt and started quietly disappearing in the past decade. But now they’re coming back swinging. Some new investors are breathing life into the iconic brand. Can Radioshack rise from the ashes?
Radioshack is coming back
Radioshack is an American retailer that was started way back in 1921. The business was founded by two brothers, Theodore and Milton Deutschmann, who wanted to provide equipment for the growing number of amateur ham radio operators.
Their first store was located in downtown Boston. At Radioshack’s peak in 1999, the franchise had more than 500 stores in the United States, Mexico, United Kingdom, Australia, and Canada.
In the 21st century the brand was unable to evolve with the times and sales declined. Many blame the companies slow adaptation to rapid advancements in the computer and mobile industry.
Radioshack was forced to file Chapter 11 bankruptcy protection in 2015 and 2017. But they’re not finished yet. Several investors have recognized the brand’s potential and they’re investing big.
Alex Mehr and Tai Lopez are two investors who have purchased a portfolio of well-known American brands such as Pier 1, Dressbarn, and Modells. Now they’re focusing on building Radioshack’s e-commerce stores. “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 a lot of the time just means people have a memory of it. I’m not sure that just remembering something is leverageable enough to be able to convert something into success.”
Radioshack will be celebrating its 100th birthday in 2021.
There are still 400 retail stores open, but the new investors have made it clear that e-commerce is the future of the company. “We bought the raw material to build a big business,” Mehr said. “Brand means trust. And the brand is very, very strong. I have quantifiable data that the brand is very strong.” Mehr is betting on the Radioshack brand to help differentiate themselves from the sea of discount sellers on Amazon.
The team will continue selling Radioshack products on their website and on Amazon as well. “It’s like a big mall with a lot of traffic,” Mehr said. “So I think of Amazon as a partner, and I’ve done that in other brands, too.
So this is yet another distribution channel for us.” The COVID-19 pandemic of 2020 has been brutal to retail businesses, but online sales are up big. Amazon stock has doubled since the same time last year. Mehr and Lopez are hoping to see similar gains with their latest investment.