The Shack Is Back

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Back in February 2015, Radio Shack filed for bankruptcy.

Many of us feared that we had lost a popular source of electronic products and parts. Well, in case you didn’t get the memo, Radio Shack is alive and well as a new company. It did not come out of bankruptcy as is the usual case. Instead, Standard General, a New York hedge fund, bought the assets and brand and formed a new company under the ownership of General Wireless with the name Radio Shack. It retained about 1,700 of the original 4,000-plus stores. Roughly 1,400 of the 1,700 are co-branded with Sprint and the telecommunications giant will sell cell phones and subscriber plans on-site.

Radio Shack is now a greatly scaled-down company and more focused on building a new business model around its stores and a greatly expanded online presence. It will continue to sell popular consumer electronics items, but also will take advantage of the growing DIY/Maker niche. Look for a growing number of Radio Shack smaller electronic kits in stores in the months to come. What they really need is a few signature larger kits to generate some significant buzz and dollars. Drones and robots come to mind, but that has been done. How about more radio products? Why not ham radio products, as this is a known and growing market? Besides, the former ham kit company Heathkit is not doing anything.

Radio Shack is also pursuing an educational approach to the hobbyist market. It plans to participate in the STEM (science, technology, engineering, math) movement in schools to introduce students to these technical fields. It will also offer in-store learning sessions and demos. I urge them to do even more educational projects like offering books, learning kits, and online webinars.

I am glad to see the survival of Radio Shack. It will continue to be a valuable resource for parts and accessories that many of us have come to rely upon. Let’s hope it flourishes with the new focus and direction. Check out the new website for an update.

The whole Radio Shack bankruptcy and re-emergence took place in less than a year. Yet here we are many years later still waiting on Heathkit to come back to life as the premier kit maker. So far not much is happening. A few years ago, Heathkit conducted an extensive survey of old and potentially new customers to find out what they wanted. What came of that was a $149 AM radio. A TRF rather than superhet version at that. Battery powered with no tuning dial or speaker. What were they thinking?  Who is the market for this anyway? Kids? Really? People still do listen to AM radio, but mostly in their cars. It is an adult news and talk radio business. Kids and millennials listen to online sources mostly and FM if it is radio.

Anyway, what’s up with Heathkit? Such a great name and reputation is just going to waste. We all know that designing new kits is not easy, especially the larger and more complex kits Heathkit is known for. But how many years does it take? Is it a cash problem? Or maybe the new owners do not believe they can live up to Heathkit’s glorious past or new customer expectations. Whatever. Hey, Heathkit guys, do something soon. Radio Shack is already showing you up.

UPDATE: Readers weigh in, and Lou responds.

Looking for parts? Go to SourceESB.

Discuss this Blog Entry 17

on May 24, 2016

I agree, there was a drop in DIY kits for a while, but now that the younger generation is far more tech savy, DIY is coming back. Dare I hope that there will be a resurgence in discreet analog electronics?

on May 24, 2016

There is a single individual who claims the assets of Heathkit and as near as I can tell he is trying to make a business out of selling copies of Heathkit manuals for those of us trying to resurrect older units that we acquired sans manuals. There are a few Ham radio oriented sites that sell NOS or salvaged parts for Heathkit as well. In any event the market may indeed be ready for another Heathkit style company but I think the old one is moribund and stifled by the low aspirations of the current owner of the Heathkit assets. We used to have Knight Kits (Allied Radio) and Eico Kits too (Lafayette Electronics?) Maybe Allied Electronics, with its interest in supporting the MAKER phenomenon, could be encouraged to bring back Knight Kits. Amateur Radio, Electronic Test Equipment, and Embedded computer applications come to mind as likely markets. My 2 cents worth.

on May 25, 2016

As a ham and a builder, I would love to see Heathkit get back to doing what they used to do. Even redoing some of their famous kits would be nice. There are a lot of QRP (QRP radios are 5 watts or less on CW, FYI) kits out there from various vendors. Like the one watter from kitsandparts. Fun kit and works real well. If Radio shack could come up with some kits, whatever they may be, that would be quite nice too!

on May 25, 2016

Radio Shack would do well to provide classroom webinars. No instructor would not welcome sitting in the back of the room while this new format of filmstrip (that's date stamping me!) is entertaining and informing the students.

on May 25, 2016

I don't think they're going to make it long term.
All but one of the stores are now closed in my area, Charleston, SC.
I recently went into a store in NC and was told they didn't have what I was looking for. I proffered that they probably had it online and was told that part of their chapter 11 was to shut down their online sales.
When I got back home, I looked online and although they did still have some online sales, they had very little for sale.
This won't work against Amazon, eBay, etc which did have what I wanted to buy.

on May 25, 2016

When I lived in Charleston, S.C., they had Radio Labs on E. Bay street, as well as a place that sold Navy surplus from the base there.

Is any of that still around? We need more independent stores.
regds

on May 25, 2016

The only RS left is in Mount Pleasant. And I haven't heard of any of the one's you mentioned.

on May 26, 2016

I remember Radio Labs very well... I would spend hours going through the bins looking at all the parts... I bought my first 2-way radio there... My buddies and I would go next door to the Channel 5 broadcast studio and take a tour of the control room and microwave gear that shot their signal to the broadcast tower on Rifle Range Road in Mt. Pleasant...

on May 25, 2016

Yes, I have to echo that sentiment. My local RS/Sprint store carries Maker kits but they are horribly marked up, way too expensive to compete with very competent online competitors.

They carry a fair selection of things you might need spur-of-the-moment like a cable or a connector, or perhaps some battery power related items. As for the rest of the "maker/electronics hobbyist" stuff, it's too pricey to be a revenue generator for them: no one wants to pay that much especially if they can wait 2 days for shipping from DigiKey, Amazon, Adafruit, and the like.
The rest of their offerings are second-tier lower quality offerings oriented towards the cell phone customer: earbuds, chargers, etc.
The worst part? They close during the lunch hour! That's exactly when I want to go there! I asked the 2 guys and they said it had something to do with overtime hours and labor rules. That's a real head scratcher. You can't sell if you're not open, and they're closing their store during peak errand-running time for most working folks.
I don't think they are going to do very well going forward.

on May 25, 2016

Lou, As always, you post great articles and of topics that I really enjoy. This is one especially dear to me, especially as a Ham and an Electronics Engineer who loves 'tinkering' in his own home - much to the frustration of his mate. ("Don't you get enough of that at work?!!")
I can't believe that a hedge fund company was able to clearly see the business/market for Radioshack that the original Corporate Management could not - that's outstanding to me. The direction you described is clearly the direction I thought the company should take, based upon their history. All 'do it yourself' markets, Ham radio enthusiasts, STEM, Drones, etc. Even pairing with the companies that offer fabrication and manufacturing of PCBs and assemblies for inventors and hobbyists. As well, there are small companies that offer all kinds of training and DYI manufacturing capabilities for those who need an 'incubator' for their ideas and small company startups. Pair all of this with 3D printing and 'holy cow', America has now become the land of opportunity for the individual, once again!

on May 25, 2016

I posted my observations, including a very big problem for RS customers, on my blog. In my opinion RS is a stumbling empty hulk of it's former self at this point and I don't recommend that people blindly patronize them. Here's the blog post I mentioned (you might have to cut & paste the link as this comment system wants to post the entire article rather than just a link to it): virtualvenesect.com/2016/01/21/the-new-radioshack/

on May 25, 2016

As far as RS brick and mortar?

Who makes a DIY kit for either a fixed platform or conveyor toaster oven for IR Reflow? Shipping cost would be high and I would like to buy it at brick and mortar. Can they put new batteries into old (i.e. $120 battery VS $650 new phone using old 4G)? What about cell repair or refurbs? What about SMT parts on cut reel that you can get N-O-W! They always did well on connectors, premade cables, adapters, but had a limited product line. Try finding the old 6 foot whip antenna that they used to have - - - not all wireless takes place at 2.3 or 5GHz. Just look on Kickstarter for inspiration - - what are they doing to partner with backers and makers? Why don't you still have a tube tester (or offer a kit one?) and stock Svetlana and Chinese tubes? Do like you did in the olden days 1) start in the major metro areas. 2) Cater to the maker/kickstarter folks 3) start with higher margin stuff - - the old store managers said they wanted to get away from resistors, caps, and other parts for years, but the company recognized that with a 250% markup, the "have it nows" provided them with a steady income on the big margin side. In the cellphone and tablet world, markups are low and competition is intense. 4) most folks want to cut the cord from the cable company, but they still want local news, sports, and weather without hunting through 100s of newspaper popup ads (read here: local broadcast TV). My rabbit ears from the big box store work lousy - - where do I get an outdoor antenna and the previously cheap 5 and 10 foot mast sections? Also, if brick and mortar is really dead - - why is there still an Apple store?

End of Rant!

on May 25, 2016

I believe the standards on the Heathkit TRF AM radio are very high. Jameco does kits, I think by interacting with the kit designers, some of whom are hobbyists. Heathkit may be open to this sort of input, but I think few of us will be willing to conform to their very high standards. Still, worth a try.

on May 25, 2016

Another thought. I do not think that their standards were too high, but their prices are. There are many categories of things that could be marketed to folks in kit form, but you need a competitive edge to succeed. High quality kits at a reasonable price was the original Heath business plan and I think it is still valid, One possibility is USB based test equipment that includes an easy way to use it with your PC, i.e. software app to log data from an ADC module used as a DVM one minute or a LCR bridge the next or a thermocouple i/o the next (Think Nat Inst). Don't get too grandiose or you'll price yourself out of the DIY market. Let the customer add the value of their labor to the project and gain the satisfaction of building it themselves. Another 2 cents worth.

on May 26, 2016

There's a RadioShack left in Saginaw, Michigan! Stop by and check it out!

on Jun 8, 2016

I worked for Radio Shack in it's heyday (early 1980's) when it had a great catalog and lots of home-brand products, especially the TRS-80 computers, their audio equipment and a huge variety of electronic parts and test equipment. When the catalog was discontinued I saw the handwriting on the wall. This was followed by discontinuance of the RS-branded products and then they began selling of other peoples computers, printers, etc. Now it's primarily a Sprint store and that's such a shame.
I'm heartened by this "re-emergence" and hope that the new corporation takes note of what made the store successful before and what led to it's downfall. Fail to learn and history will repeat itself.

on Jun 22, 2016

That was an really impressive post and i like that.
www.19216811ip.com/

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