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DON'T BUY RADIO SHACK!!!

0 points posted to Dell by jervis961 Apr 23

There is a rumor out that Dell is trying to buy Radio Shack.

http://tinyurl.com/6dzwte

While I would like to see some Dell stores this is not the way to do it. Just about every Radio Shack I've been in is a run down mess and not the place I would think of for cutting edge tech. Dell needs to build up its brand not sink it lower.

sugarbear
Apr 23		 At least there is a Radio shack near me and it`s a fairly new, small facility. I believe it is a franchise store.
phubert
Apr 24		 I find them easily accessible. Honestly, I think you're MORE likely to find tech support there than with Best Buy or Staples! Anyway, I suggested the _opposite_, Jervis, so I guess I _have_ to demote! :-D
jervis961
Apr 24		 Think of the amount of money it would take to buy them out and then fix up the stores. They are trying to save 3 BILLION dollars in costs this would only skyrocket them. If they were looking to buy something like GameStop it would be a different story as it would better fit into the image Dell is looking for.
anji
Apr 24		 It depends what they use the stores for, and what they could cut out of the existing budget that the stores would absorb. More systems could be sold and serviced because a lot of people want to bring theirs in to real people, in a real place, and get it back in a reasonable amount of time. IF Dell extends their current tiny retail base and sells pre-made systems, it could be very profitable.
phubert
Apr 24		 Fix up? The ones near here seem pretty decent.
jervis961
Apr 24		 I've seen some real dumpy ones. The ones in the mall are usually clean but cluttered while the stand alone ones can be quite disgusting.
phubert
Apr 24		 I've seen poorer ones in the past, but still, it could be a chicken & egg situation, too. I haven't heard the rumors of a Dell purchase, and I really _don't_ know that it would be good... I mean, weren't "bricks & mortar" already declared dead??? Didn't Gateway fail in it's attempt??

Could Dell do better?

Best not to give too much credence to rumors... especially since, as you point out, jervis, Dell is in need of cost-cutting...
jervis961
Apr 24		 I mentioned gamestop because it falls in line with Dell's XPS line and trying to appeal to gamers.
jervis961
Apr 24		 And radio shack is known for odds and ends like connectors and inferior small electronics. I was just giving the example because gaming is part of what Dell is known for and gamestop has a good reputation.
jmxz
Apr 24		 I liked Radio Shack better when it was full of electronic components so you could build whatever you wanted as a hobbyiest. These days it's hard to find a place that'll sell a wide range of transistors, capacitors, etc in small units.

Oh - and if Dell does buy them, I sure hope they don't force Windows Vista Ultimate to be bundled with every resistor, calling card, or whatever else radio shack sells these days.
phubert
Apr 25		 When you think of it, it COULD be a good move, depending on the strategy Dell was trying to implement.
jervis961
Apr 25		 Even with the best strategy it would take a boatload of money on top of whatever price they pay for the company.
phubert
Apr 25		 Not necessarily. And of course they could take several routes... keep the name and management and work the Dell strategy INTO the existing structure (less costly).

Is Radio Shack profitable? What is its current ownership? How are individual stores doing?
jervis961
Apr 25		 Maybe it isn't as bad as I thought. The stock is in a slump worse than Dell's ($17 range down from around $32). They seem to go through a slump every other year or so and then bounce back up so if that trend continues Dell could profit on it. Profits 3 years ago were 350,000 or so, 2 years ago was only 150,000 and this last year was 380,000. I guess Dell could improve the company but I'm still skeptical.
phubert
Apr 25		 The _real_ question is "What could Dell do _with_ it?" How could they leverage the RS presence to their advantage without harming the company or themselves?

The comments about hobbyist builders using RS in the past might turn out to be useful to draw in just that sort of customer in a way that wouldn't tax Dell's resources, but could generate sales of Dell products while adding more service-oriented OUTLETS _for_ Dell.

There are a number of possibilities here that could work to the mutual benefit of RS and Dell. RS, in particular, might benefit greatly.

And, there's mindshare. Great place for Dell to "experiment"...
winoffice
May 14		 I do not really buy into rumors so quickly or so much, so I do not see any need to worry. Probably this will just remain a rumor.
phubert
May 15		 right! Like the recent one that IBM would stop selling x86 systems!
paperpilot
May 15		 When I was a kid and people built their own electronics, you went to Radio Shack to buy your parts. Now they have degenerated into mini Circuit Cities staffed by clerks who don't know the difference between a transistor and an FET. If DELL bought the chain to sell computer parts to the DIY crowd, I think they could turn a profit.
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