Three Famous Companies That CRASHED HARD — History in the Dark

[00:00:00] Speaker 1: I don't want to grow up on a Toys Riscuit The guy with a million toys, a Toys Riscuit that I can play with I don't want to grow up, I'm a Toys Riscuit We got the best for so much less, you really flippin' lit From bikes to trains to video games It's the biggest toy store there is I don't want to grow up [00:00:28] Speaker ?: Cause baby if I did I couldn't be a Toys Riscuit More gay, more toys Oh boy, I want to be a Toys Riscuit [00:00:37] Speaker 2: Toys R. Us It's a name that is familiar to many people in my generation As well as previous generations For a long time they were THE toy store They weren't the only one But they were THE toy store, you know The one everyone wanted to go to Every kid was always excited to go and do a Toys R. Us But in more recent times, they've fallen off and gone under And now, you just don't see Toys R. Us anymore At least not to a significant extent And though they are in the process of trying to come back They're not anywhere close to what they once were What happened to them? What could have possibly gone wrong here? Well, like all these corporate downfall stories There was a few things Some of which were very self-inflicted But others weren't necessarily their fault I know I say that a lot But business tends to be complicated But let's talk about it The origins of Toys R. Us date all the way back to 1948 To a man named Charles Lazarus Lazarus Lazarus didn't start out by selling toys, however In the early stages of what would eventually lead to Toys R. Us He was actually selling baby furniture Out of his father's bike shop in Washington, D.C. See, it was post-World War II And Lazarus had served during the war Naturally, he had plenty of friends he had spoken to while in the service And according to him Every single one of them Said all they wanted to do when this whole thing was over Was to go home, get married, and have kids This would wind up being true As, in retrospect, we know that just after World War II Was known as the Baby Boom When everyone was, indeed, having kids Just so many babies Just so, so many babies Listen, humanity had gotten through the worst global conflict We had ever seen We were having kids It's what we do And it was a good time for that anyway Because during the 50s The American economy was on point People had money People had homes People who were getting cars And they could afford To have pretty big families Lazarus already wanted to start a business of his own And to him, it made sense Because everyone wanted to have babies To sell stuff for babies Over the following decade, his business grew But he was a very adaptable individual And good at judging how certain things were selling And what people wanted And one of the things he started including in his baby store Were toys Because, well, babies like toys too But he noticed the toys were actually selling really well Plus, over time, all the babies were growing up Humans are only technically babies for a year or two And then they become toddlers and kids And toddlers and kids don't need cribs and highchairs anymore They need toys His first store was known as Children's Bargain Town But Lazarus envisioned something even bigger What would basically be a big box outlet But a specialized one for toys In 1957, he got out of the baby furniture business entirely And renamed his company to Toys R Us You know, like Toys R Us Like, like caveman speak Toys R Us Me Ugg Me make fire Me play with Barbie Ugg like Barbie But, I mean, it had the word toys in it And it was kind of a catchy name So, you know And according to most sources Toys R Us was, in fact, the first ever big box toy store And at the time Not only was big box a new thing But a big box toy store was an especially new thing Because prior to that Pretty much every toy store Was relatively small And family owned And because of this The line of products was limited But Lazarus built gigantic establishments Because big box And he could just shove So, so many toys In the store Just an insane Stupid Outrageous Amount of toys And it was Every Kid's Dream The second any 8 year old Walked into a Toys R Us They were in heaven Because there were so Many toys So much fun To be had A trip to Toys R Us Became a real special treat For so many kids And parents loved the chain too Because Well, for one thing It made their kids happy And for two Because they were a big box establishment They could often offer cheaper prices Than the smaller toy store chains could And the wider selection meant They would find toys That they didn't even realize existed And that their kids might want For like Christmas Or birthdays Or something Some retail historians Consider Toys R Us The very first ever Category killer A category killer Which is almost always A big box chain That specializes in a given category And does it so well That they effectively drive All their major competition Out of business Now, such a thing Wouldn't last for Toys R Us As doubtless you're aware But for a long time Toys R Us Was again The toy store Was the place to be If you wanted toys By 1965 Lazarus owned five Different Toys R Us stores And because they were A big box chain They adapted Big box strategies Such as Loss leader pricing I've talked about This tactic before But I'll explain it again In case you haven't Seen my other videos Basically Toys R Us Was able to offer Certain items At a price That was below Their wholesale cost This meant That whenever they sold them They were taking a loss In their face value This doesn't seem to make sense But because these were Such good deals It lured more shoppers Into the store And shoppers When they go into a place Like a big box store Wind up seeing a lot Of different merchandise And more often than not While they would get The thing they came for They'll often leave With some extra stuff too That the store was selling For profit This tactic has been Proven effective Many many many times By many different Big box stores Toys R Us is just One example Another thing that Probably helped Toys R Us Big time Is that After World War 2 The toy industry Changed too And went through A long And massive Period of growth So many different Brands of toys Were released During this time It's pretty easy To lose count But between the 50s And the late 90s We're talking about Things like Mr. Potato Head Barbie Easy Bake Oven G.I. Joe Transformers Teenage Mutant Ninja Turtles And of course The ever present Pokemon I'm a 90s kid Pokemon was my jam Do you have any idea How much Pokemon stuff Was in Toys R Us In the late 90s It was It was awesome I'm not gonna lie Bow down To the mighty Pikachu Actually my favorite Is Flareon The mighty Pikachu My point is that This was a great time To have a toy store Because there were So many toys Kids wanted Long lines Of different toys Available And all of them Could be found At your nearest Toys R Us However by 1966 Lazarus felt That he would need More resources And by that I mean money In order to really Push his brand Beyond what he was doing They were growing But it was slow He decided to Actually sell it To a company Called Interstate Department Stores Incorporated Because he wanted To raise Expansion capital Interstate bought Toys R Us For 7.5 million And they were able To take the company Into the public sector They allowed Lazarus To stay on as CEO Because he was Doing really well He was good at the job And he was making Logical decisions And it proved to be A very good investment For Interstate Because Well With all the money He suddenly had Lazarus pushed For an aggressive Expansion campaign That pushed Toys R Us To nationwide status Throughout the 1970s By 1978 They were the largest Toy retailer In the entire United States With a total Of 182 stores And those stores Were of course Working for them They had 1 billion Dollars In sales In the late 70s That Was impressive Naturally the expansion Continued And they actually Upped the pace In 1983 Alone They opened 236 new locations Which is Insane And by the middle Of that decade Toys R Us Constituted a quarter Of all the toy sales In the US By the beginning Of the 90s They were a Worldwide brand With over 1300 stores In total They would continue Their dominance In the market For a few more Years But towards The end Of the 90s Which I feel Like I say a lot The end of the 90s Was really bad For certain retailers Things did Start to change For them See they weren't The only kid On the block Anymore Yeah they were Great for toys And everyone Loved them And they had That awesome Giraffe mascot Named Jeffrey Everyone loved Jeffrey I like the era Of Jeffrey Where they literally CGI'd a realistic Giraffe to represent him I thought that Was hysterical [00:09:27] Speaker 3: Jeffrey are you Sure about this Are you kidding We're launching Our biggest season Ever With great low prices And more selection Than anyone And I want Everyone to know About it I know but your Head's too close To the helium [00:09:39] Speaker 1: Ladies and gentlemen I have a very Important announcement [00:09:42] Speaker 4: Check out this week's offers Like buy two Get the third free And all gamecube software Gamecube system Now $99.99 And Hokey Pokeyomo Now $19.99 And get a free Barbie carry case With select Barbie Purchase of $35 or more This week only At Toys R Us Hey hey [00:09:54] Speaker 2: I can see my house From here But that sort of thing Only gets you so far The thing is The more general Merchandise Big box outlets Walmart and Target Started taking notice Of the success Of Toys R Us And realized How lucrative Toys were This was also About the time That both those Brands were making Their own stores Bigger So one of the Changes they made Was to expand Their own Toy selection And you might be Saying well Toys R Us Still is going to Have more toys Though right And yeah Literally always That was never Not the case The problem though Was pricing Walmart and Target Made it a point To isolate which Toys were actually Selling And made sure To have those And because they Were a general Merchandise Big box outlet They could do The whole loss Leader pricing Way more effectively Than Toys R Us Ever could Because they had Way more stuff That they could Sell at a profit And sell the toys At a loss Whereas Toys R Us Only had their toys And yeah They could sell Some of them At a loss But not all of them And especially Not the popular ones Because those are The ones they knew People were going to want So they couldn't Necessarily afford To always take hits On them Economic changes Also meant that People had a lot Less spending power Than they once did And while the toy Market is extremely Profitable It in particular Is very vulnerable To economic recessions Or god help you Depressions Because toys While I do think They're important To any developing Child They should have Some entertainment They are at the End of the day An option You don't need Toys You need Food Which Walmart And Target Were selling You need Basic furniture Which Walmart And Target Were selling You need Things like Toiletries Toothpaste Clothes Which Walmart And Target Were selling Do you see The problem now? It also didn't help That Walmart And Target Are both One stop shops You can go in there Get pretty much Everything you could Possibly need And not go to Any other store I've explained before That shopping Is not just A monetary investment It's also A time investment In the modern day A lot of people Don't want to Spend all day Shopping They don't want To go to Multiple different Places They want to Go to Just one And when Walmart and Target Have enough Toys As well as A whole bunch Of other stuff That you actually Need for your Home Why would you Ever stop at Toys R Us? There was no Reason to Anymore Walmart and Target Supply chain Management was Also top tier And Toys R Us Supply chain Was never as Good as Especially Walmart's Which also helped The other chains Undercut their Price And of course Online shopping Was coming into The fold Which was another Threat that came At a lot of Different retailers This put Toys R Us In a really Awkward position While the existence Of Pokemon did Give them a small Boon in the late 90s It dropped from There By 97 They only had 18% of the Overall toy sales And their profit Margin would fall From 12% in 1990 To 8% In 1997 In 1998 They filed Their first Bankruptcy Chapter 11 Bankruptcy Protection This While bad Wasn't the end Of them As I'm sure Plenty of you Know They did come Back from this And it was Probably a good Call The filing Let them Restructure Their internal Debt While also Continuing Their normal Business operations It was one of Those quiet Bankruptcies Too Not a lot of People even Really talked About it Because Toys R Us Was not going Anywhere And no one Ever thought They were At least At that time And they Actually emerged From the bankruptcy Pretty alright They reoriented Themselves well The restructuring Was successful But in the early 2000s Things started Changing again Walmart and Target were Even bigger But the online Thing was a Major thorn In Toys R Us Side Online retailers Don't have to Pay for a lot Of overhead And thus could Also undercut Toys R Us Prices And shopping That way Was becoming More popular Because people Were like Well I don't Even have to Go outside To buy my Kid a toy Now Even Walmart And Target Were threatened Which is why They started Their own Online storefronts But Toys R Us Was very Very Very late To this party And the thing Was they'd Also started Losing their Luster Over the years Toys R Us Was once This magical Heavenly place For children But a lot Of them Were very Dated They got Very Kmart In this regard The stores Desperately Needed updating While they Still had A lot Of toys You could Tell that They were Old And in Need of Refurbishment But they Didn't have The money To do That all At once They attempted To branch Out a few Times With chains Like Kids R Us And Babies R Us Babies R Us Was actually Basically Lazarus's Original Business idea Which was Baby Stuff And Kids R Us Was actually For clothing But these Separate Chains Had Mixed Success Kids R Us Only stayed Standalone Until 2003 Then they Combined it With the Toys R Us And then they Stopped that Brand entirely In 2007 Babies R Us Did a little Bit better But still Wound up Being co-branded Alongside Toys R Us In 2011 They did Start remodeling Things But it was Slow going And they Might have Been able To reorient Themselves After a While Until One Little Itsy Bitsy Problem Occurred Mind you Lazarus Was not Actually Involved By the Other 2000s He Stepped Down As the Company CEO In 1994 In the Year 2000 The CEO Named John Eiler Eiler Was pushing To remodel And relaunch The chain And though They started On March 17th 2005 Toys R Us Was bought Out A consortium Of Bain Capital Partners LLC Colbert Kravitz Roberts And Vernado Reality Trust Announced A 6.6 Billion Dollar Leveraged Buyout Of the Company This Made Toys R Us A privately Owned Company Again And as a Result The public Stock Options It's closed For the Last Time On July 21st 2005 So you Get $26.75 A share Now why Was this Necessarily Bad Private Buyouts Can Sometimes Help A company And yes Sometimes But this Wasn't Any Old Buyout Remember This Was a Leveraged Buyout And a Leveraged Buyout Is not The Same Leveraged Buyout Is Different Than A Regular Buyout A Leveraged Buyout Or LBO Is A Buyout One Company's Acquisition Of Another Company But The Buyout Is Utilizing A Significant Amount Of Borrowed Money Or Leverage To Actually Meet The Cost Of That Acquisition And The Assets Of The Company Being Acquired Are Often Used As Collateral For Those Loans Basically The Leveraged Buyout Resulted In Toys R Us Which Mind You By That Point Was Doing Fine But Not Necessarily Great And Already Had Their Own Debs Suddenly Had Billions Of Dollars In Debt To Pay Back Over Five Billion To Be Precise And That Meant They Had To Pay 400 Million Dollars Per Year In Just Interest Payments I Repeat 400 Million Dollars Per Year In Just The Interest Now This Wasn't All Bad It Did Give Management More Flexibility To Try To Turn Operations Around But They Proceeded Not To Do That They Didn't Update The Stores Quick Enough They Still Dragged Their Feet On The Whole Online Thing Though They Did Start Someone Investing In That But The Biggest Problem And Probably Stupidest Decision They Made Is That They Decided To Adopt Walmart And Target Tactics And Actually Start Limiting Their Toy Selections To Only The Most Popular Thing This Was An Outrageously Stupid Thing For Them To Do The Reason For This Is That They Gave Up Their One Advantage The Only Thing That Toys R Us Had Over Both Target And Walmart Was The Selection Like Yeah A lot Of Those Alternate Toys Didn't Sell As Quickly As The Really Mega Popular Stuff But You Could Often Sell Those Toys For A lot Less As Impulse Buys For People Looking For Something New Something Different The Thing About Toys R Us More Than Anything Was That When People Walked In They Would Wind Up Seeing Something A Toy That They Didn't Even Know Existed Before It's Not Something Any Other Store Could Stuff That Everyone Else Had But The Second They Did That Why Would You Ever Go To Toys R Us At That Point You're Both More Expensive And You Have The Exact Same Thing As Walmart And Target Do Even Though Those Two Shouldn't Be Able To Have As Much Selection Because You Have Literally More Space Dedicated To Toys It's All You Have Well That And The Clothing Lines But You Get My Point Limiting Their Selection Was Basically Suicide It Was The Exact Opposite Of What They Should Have Done They Should Have Leaned Into That Advantage Updated Their Storefronts And Focused More On Online And If They Had Done That They Probably Wouldn't Have Gone Into Bankruptcy A Second Time Even With That Outrage Debt And Yet They Didn't Do That From 2006 To 2013 Toys R Us Only Had A Single Profitable Year Every Other One They Were In The Red And By 2017 They Were On A Steep Down Slope That Year Is The Year They Announced Their Plans To Close 180 Of Their Stores In An Effort To Try To Stabilize Themselves But By That Point There Was Nothing They Could Really Do To Avoid The Inevitable They Filed For Deal With That Five Billion Dollars In Debt That I Mentioned Before The Bankruptcy Protection Did Allow Them To Borrow Two Billion More Dollars Which Great But They Were Going To Use That Money To Properly Prepare For The Upcoming Holiday Season Which To Be Fair On Paper Made Sense The Holidays Are Big Especially For Toys It's Christmas Time Toys Under The Christmas Tree It Weren't Necessarily In The Red For That Quarter But They Were Barely In The Black It Was Horrifying And Technically Overall They Were In The Red Because They Definitely Did Not Make That Two Billion They Borrowed Back They Hadn't Had An Annual Profit At All Since 2013 And With Seemingly No Way Out It Put Their Workforce Of 64,000 Individuals Who Actually Kind Of Like Their Pretty Fun Place To Work But It Put Them At Risk Of Losing Those Jobs Initially They Claimed That Only The U.S. And Canadian Operations Would Be Affected By This But In January Of 2018 They Realized There Was Just No Way Out The Holiday Season Had Made It Clear That They Were Done As Thus They Would Proceed To Start The Liquidation Process Closing Up To 182 Stores By The End Of February They Were Looking Into Possibly Trying To Retain Their Stronger Canadian Operations The Ones That Were Actually Doing Well As As Divest A Lot Of The Still Corporate Owned Stores Into Franchises Though Later They Were Announced That Every Single Location In The United States Would Be Closed Down On March 15th 2018 Tar Us Received Approval For The Bankruptcy Court To Liquidate Its Stores The Liquidation Sales Began On March 23rd 2018 Their Online Stores Shut Down On March 29th And On April 24th It Was Announced That The Canadian Division Would Be Sold To Fairfax Financial For $234 Million Dollars Who Would Continue To Operate Those Locations Under The Brand Name On June 29th 2018 Toys R Us Permanently Closed All Of Its Remaining U.S Locations After Operating For 70 Years And In One Bright Spot Of The Story In Early July 2018 It Was Reported That Two Anonymous Benefactors Had Actually Purchased All The Remaining Stock Of Two Of The Stores In North Carolina So That Those Toys Could Be Donated To Charity Which Is Actually Quite Sweet The Thing About The Death Toys R Us Is That People Were Genuinely Upset By This See In My Videos About Companies Like Blockbuster Kmart Circuit City A Lot Of People Laugh At Them Especially Towards The End Of Their Lives They Were Practically A Joke And People Didn't Even Like Working For Them Or Shopping There For That Matter But Toys R Us Was Different Not Only Did A Lot Of The Employees Enjoy Their Jobs Because They Got To Work Around Toys And Sell Stuff To Kids Who Were Genuinely Happy About Just Being In The Store But For The Customer It Was A Place Of Nostalgia I'm Sure There's Plenty Of People Watching This From The Boomer Generation Generation X As Well As My Millennial Generation Can Speak Toys R Us Was A Pretty Big Deal Going There Was A Special Treat Cause Mind You My Family We Weren't Exactly Poor But We Weren't Well Off Either Lower Middle Class My Parents Didn't Have A Lot Of Money We Got By But We Didn't Have A Lot Of Extra Spending Power To Be Honest My Parents Probably Spent More On Me And My Sister Than They Genuinely Should Have But Regardless Toys R Us Was A Special Thing And With The Death Of It It Meant That No Other Kids Would Ever Get To Experience That Walking In Seeing All These Toys All These Things That You Didn't Even Know Existed And Realizing That Your Parent Was Actually Willing To Buy You One It Was A Happy Occasion And It Was Just Gone As Such People Were Genuinely Depressed About The Death Of Toys R Us Because Let's Be Fair Whether Or Not Walmart And Target Are Cheaper In The Toy Department Do You Really Walk Into Those Stores Particularly Walmart With A Big Smile On Your Face Because With Toys R Us That's What Happened As A Kid We Were Genuinely Happy To Be There That Never Happens With Walmart You're Never Happy To Be At Walmart Who The Heck Is Happy To Walk Into Walmart You Go There Cause You Have To Does Anyone Really Want To Go Here Honestly Honestly Break It Break It Break It [00:24:12] Speaker 1: Break [00:24:13] Speaker 2: It [00:24:13] Speaker 1: Break It [00:24:15] Speaker 4: Break [00:24:17] Speaker 1: It Just Go That's An Adult You're Making It Work Let's [00:24:20] Speaker 2: Just Walk Up To You Walk Up To Walk With Queers Walk With Queers That To Be Real About This But I Do Have Some Good News For One Thing The Brand Is Not Dead Worldwide They Are Still Doing Okay Particularly Over In Asian And They Did Manage To Stay Alive Up In Canada But As For Here In America Well They Have Been Going Through A Bit Of A Revival Period Yeah Toys R Us Is Trying To Come Back And So Far It's Going Okay I Would Say Not Amazing They Probably Will Never Be As Dominant As They Once Were But They Will Probably Be Able To Keep Existing As Long As Which Stated That It Would No Longer Auction Off Its Intellectual Property And This Was Because The Controlling Lender Wanted To Revive The Business Utilizing Both The Toys R Us And Babies R Us Brand Names They [00:25:21] Speaker ?: They [00:25:21] Speaker 2: Were Planning On Focusing On Trying To Maintain The Existing Licensing Agreements That They Already Had And Establish Newer Opportunities In The Future They Felt That Selling Off The Brand Wouldn't Actually Result In A Good Outcome So It Was Kept And At The Toy Industry Association's Fall Toy Preview They Unveiled Plans For A Preliminary Venture Into A Revival Which They Called Jeffree's Toy Box This Particular Outing Was A Wholesale Store Within A Store Ugh God I Hate Them But Wholesale Store Within A Store Concept That They Planned To Deploy In Time For The Holiday Shopping Season If That Went Well They Wanted To Revive The Toys Are Us And Babies Are Us Brands Sometime In The Future In November 2018 It Was Made Public That Grocery Market Chain Kroger Was Going To Add Toy Displays Under The Jeffree's Toy Box Brand At Select Locations And The Whole Jeffree's Toy Box Thing Kind Of Did All Right For Them It Wasn't Like An Amazing Success But It Was A Good Idea That Attracted Interest Because Remember Like I Said People Were Upset That Toys R Us Had Gone Under Unlike A Lot Of The Other Companies So When It Was Announced That They Were Reviving It People Were Like I Gotta Help I Gotta Buy Something I Gotta Buy Something They Saw It In The Program They Were Like I I Don't Care What It Is I'm Sure The Misses Will Be Perfectly Fine That I Spent All This Money On A Brand New Unicron On January 20th 2019 They Did In fact Emerge From Bankruptcy With A New Name Known As True Kids And On June 21st They Explained Their Plans To Open New Stores In The U.S. Which They Wanted To Be About 10,000 Square Feet This Would Be A Smaller Store Setup But It Meant They Could Shoot For A More Creative Modern Appearance That Might Work Better And Also Be More Cost Effective Because The Buildings Weren't As Big On November 27th They Followed Through Opening A Retail Store At Westfield Garden State Plaza In Paramus New Jersey On December 7th A Second Location Opened At The Galleria In Houston Texas And On October 8th They Relaunched The Toys R Us Website Because Of Course This Is The Modern Retail Arena They Knew They Had To Get Into The Online Market Though They Handled It In A Unique Way The Toys R Us Site Featured A Focus On Resources And Videos That Highlighted Popular Toys And It Was Established In A Partnership With Target Interesting Former Enemies Are Now Friends Huh Okay The Result Was That Users Were Redirected To Target Dot Com To Actually Place Orders For Toys But That Agreement Would Lapse In 2020 Role Not Sure How Much I Agree With Using A Competitor In This Manner Cause Like You'd Make More Money If You Were Doing It Yourself But Maybe They Just Don't Have The Capital For It And If That's The Case This Might Be The Best Root In Order To At Least Stay Relevant And Get The Brand Out There I Mean Store Within A Store I Guess Was Already Kind Of A Partnership But At Least There It Was With Kroger And Kroger Is A Grocery Store They Were Never A Competitor To Toys R Us But Anyway That's Just Me Thinking Out Loud Again However We're Now At 2020 When Things Got Kind Of Awkward For Every Retailer Because Of COVID-19 The Pandemic Threw A Monkey Wrench Into The Revival Plans Quite A Bit The Two Standalone Stores They Had Managed To Open Had To Close Again Because Of Financial Losses They Sustained Throughout The Whole Quarantine Period People Could Barely Go Get Groceries They Were Not Going To A Toy Store That Didn't Happen But Fortunately They Didn't Actually Wait To The Last Minute On This See According To Them This Was Strategic Because They Realized There Was No Way They Were Going To Keep Those Stores Afloat So They Closed Them Down While They Still Could In Order To Save Money In The Long Run And Alter Their Entire Strategy This Way They Could Invest That Capital Into Newer Stores That Would Offer Them Better Traffic As Well As Being Throne Out With Better Timing Not Being Crippled By An Unforeseen Helping And Guiding The Expansion Forward Though By Acquiring An Interest They Did Inject Money Into True Kids And They Would Help Use That Money To Formulate Plans And Open New Toys R Us Stores A Second Time And Remember This Is March They Really Wanted To Do This Before The 2021 Holiday Season Because They Were Not Dumb Holiday Season Christmas Presents Toys They Wanted To Get One Or Two Stores Open Before Christmas Hit And They Had A Bunch Of Different Format Ideas Including Flagship Stores Smaller Pop-ups Locations At Airports Which Is Interesting As Well As The Store Within A Store Idea By August They Had A New Deal With Macy's To Sell Toys On Their Website As Well As Open Store Within A Store Locations At 400 Different Macy's Department Stores But They Are Doing A Lot Better Than You Think And On December 16th Right Before Christmas They Opened A Two Story Flagship Store Which Was 20,000 Square Feet In The American Dream Meadowlands Mall In East Rutherford New Jersey And By August 7th Of 2022 It Opened New Locations In Nine Different States California Georgia New Jersey Illinois Nevada Louisiana New York Maryland And Missouri Those Locations Are All The Store Within A Store Macy's Arrangement And Vary In Size From Just 1,000 To 10,000 Square Feet They Also Opened A Second Flagship Store Inside The Mall Of America In Bloomington Minnesota In November Of 2023 And WHP Is Pushing To Just Put Toys R Us In Every Single Corner They Could Possibly Think Of On September 29th 2023 They Announced Their Attention To Open 24 New Physical Locations So So Far At least As of The Making Of This Video It Seems Like Toys R Us Is Coming Back Slowly But Surely They Are Building Up Another Presence Again I Don't Think They'll Ever Be As Big As They Once Were But Perhaps If Things Continue To Go Right There Might Be A Chance That Future Generations Will Still Have That Toys R Us Experience They'll Still Be Able To Walk Into A Building That's Full Of Nothing But Their Favorite Things Walk Around Test Out New Stuff And Just Have A Good Time Because Let's Be Realistic It's Pretty Difficult To Recreate The Magic Of Being A Toys R Us Kid [00:32:29] Speaker 5: Your Best Buys Are Always At Fry's Guaranteed [00:32:34] Speaker 2: Fry's Electronics Truthfully While Fry's Was A Big Box Chain You Might Not Have Heard Of This One Depending On Where You Live Because They Weren't As Prevalent Or As Widespread As A Lot Of The Other Companies I've Talked About Fry's Was Mostly A West Coast Thing When It Comes To America Specifically A Lot Of Their Locations Were In California However There Were Quite A Number In Texas A Couple In Georgia A Few In The Midwest But Most Of Them Were Over In The Western Part Of The United States Regardless Though They Were A Very Popular Chain Among Their Avid Fan Base Because Fry's Was Pretty Distinctive In Their Approach To Business They Were Thematic Quite Literally Almost Every Single Store Had A Different Theme Associated In Campbell California Was Themed After Ancient Egypt Burbank California Was 1950s Science Fiction Roseville California Was Railroads Las Vegas Nevada Was Las Vegas Ship Which Seems Both Appropriate And Really Lazy Actually Fishers Indiana Was Automobile Racing And So On And So Forth The Point Is That Almost Every Single Fry's Had A Different Aesthetic There Were A Few That Didn't Have A Theme At All But Most Of Them Did And This Made Fry's A Unique Experience Even Compared To Its Competitors While The Primary Competition Like Best Buy Circuit City Comp USA All Had The Usual Store Format Of A Fairly Consistent Layout As Well As Aesthetic Fry's Went Against The Grain But In This Avenue It Was Actually A Pretty Good Idea Since Again It Just Made Them More Distinctive But Now They're Gone Quite Recently They Went Under In 2021 Suddenly And Unexpectedly To The Point That A Lot Of People Don't Even Know Why So Let's Talk About It Before We Proceed Into Explaining This Though Fry's Electronics Shouldn't Be Confused With Fry's Supermarkets While They Originate From The Same Family The Fry Family If You Couldn't Guess They Are Two Completely Separate Companies Fry's Supermarkets Or Fry's With The Help Of His Brother Charles Fry's The Supermarket Chain Was Sold In 1972 To Dillon's Which About A Decade Later Merged With Kroger And The Fry's Brand Is Still A Division Under Kroger And As Of The Making Of This Video They Still Have 123 Locations Under That Brand But As I Said Despite Originating In The Same Family And Actually Having Similarly Styled Logos They Are Not The Same Company Although Fry's Electronics Does Owe Its Existence To The Sale Of The Supermarket Chain See When Charles Fry Sold The Supermarket Chain He Decided To Share The Profit From That Sale With His Sons John Randy And David Each Of The Boys Was Given One Million Dollars And They Decided Along With John's Former Girlfriend Catherine Colder To Reinvest The Money In A New Startup They Weren't Interested In A Supermarket Chain Though They Didn't Really Have The Passion For It That Their Dad Or Their Uncle Did But They Did Like Retail And They Saw Profit In Opening Up An Electronics Store It Probably Helped That John Worked As The IT Manager For The Supermarket Chain So He Frey's Electronic Store In Sunnyvale California It Was A 20,000 Square Foot Site And Based On That Yeah This Was One That Pretty Much Started Out As A Big Box Outlet While A Lot Of The Other Companies We Discussed Kind Of Eased Into That Frey's Was Pretty Much A Big Box From The Very Beginning And They Were Always Known For Being Very Large With A Wide Array CFO While Catherine Was Executive Vice President John Thought They Should Use The Model Of Grocery Retailing But Instead Of Groceries They Would Just Replace All That With Electronic Supplies And Like A LOT Of Electronic Supplies Like Stuff A Lot Of People Wouldn't Necessarily Think You Could Just Buy On A Whim Very Few Retail Outlets Sold Off The Shelf Microprocessors For Example Fry's Did And On Top Of The Electronics They Sold Things Like T-shirts Books And Oddly In The Early Days They Actually Had About Half The Store With Groceries Which Is A Weird Combination Come Get your Electronics Also Do Your Groceries What Why Would You That Was Probably Force Of Habit Given Their Background Over Time They Would Diminish The Grocery Section To Mostly Just Soda And Snacks And If You Aren't Really Familiar With Them And Maybe My Explanation Isn't Making It Clear Well If You're A Technical Person You Could Probably Consider Fry's The Physical Store Version Of A Site Like Newegg You Could Go In There And Get Any Kind Of Individual Component For A Computer You Wanted Whereas Other Chains Like Best Buy And Circuit City Specialized More In Pre-built Computers With A Few Different Individual Components But Not A Tremendous Amount Fry's Had All The Components You Could Want They Saw Growth Over Time And Fry's Locations Were Huge Even By Big Box Standards Allowing Them To Fit As Much Stuff In Them As Possible And They Were Relatively Conservative With Their Expansion As I Said When We First Started Talking About This They Didn't Really Have A Lot Of Stores In The Grand Scheme Of Things But That Kind Of Worked For Them Since They Were So Large Their Overhead Would Have Been Expensive On Its Own But Even During Hard Times Like The Great Recession For Example Which Helped Finish Off Some Of Their Competitors Like Circuit City Fry's Was Able To Stay Afloat They Didn't Have As Many Locations To Worry About Being Unprofitable Because They Well Just Didn't Have As Many Locations In General They Had A Total Of 34 Locations By August Of 2014 Though They Only Had 30 And They Finally Closed Down All Operations In 2021 But Why What Happened To Them They Had A Low Fan Base A Unique For Their Market Business Model What Could Possibly Have Gone Wrong Here Well It Was A But In Their Case That's Probably At Least Partially True Every Single Retail Outlet On The Planet Saw A Significant Decline In Revenue During The Pandemic People Just Didn't Have Money And Couldn't Go Out To Shop Everyone Had To Go Online And There Were Plenty Of Other Online Retailers That Were Better Than Fries Like Well New Egg Which Is A Convenient Segway Into The Fries Was Really Really Brutally Late To The Whole Online Sales Thing And Even When They Did Do It It Was Done Stupidly They First Started Offering Low Cost Internet Access Through Their Original Web Address Which Is Just Fries Dot Com That's Great But That's Not That's Not Part Sales That's Not What You're Supposed To Be What Why Would You I Don't Understand Don't Worry The Following Year November 2001 They Would Purchase An E-commerce Site Siberian Outpost And Started Online Sales Great Except They Used A Completely Different URL Outpost Dot Com Which Made That Loyal Customers Who Would Have Loved To Purchase From Fries Were Kind Of Confused As To Whether Or Not This Was Fries Like The Names Weren't Associated At All Why Did You Call It Something Different That's The Stupidest Thing Listen Do You Even Internet After A Few Years Of That Stupidity They Changed The URL To Fry's Electronics Outpost Dot Com Which Was A Bit More On The Nose And Then In October Of 2006 They Finally Just Used Fry's Dot Com As The Online Store And Outpost Dot Com Redirected To Fry's So Basically What I'm Saying Is In Order To Get A Proper No That's Why They Probably Lost Quite A Bit Of Sales From People Who Probably Would Have Bought From Them If They Had Known It Was Actually Them But This Random Outpost Site Who Is That I Don't Know Who That Is Is It Like Fry's I Don't Know I Guess I'll Go To Amazon Instead Cause I Trust Them We've Seen This Problem Before And Yeah It Was A Otis Operandi And By That I Mean They Had A Very Questionable Operational Strategy In Terms Of Dealing With Their Customers Oh Also Blatant Corporate Corruption That Happened Too Fry's Electronics Had A Very Loyal And Devoted Fan Base But They Weren't Without Their Criticisms And One Of The Big Problems That People Had With Fry's Is That Their Customer Service Frankly Sucked They Were Awful About Dealing With Customers And Their Loyalists Probably Didn't Even Notice Because The Loyalists Were The Techies The People Who Went Into Fry's And Knew What They Were Looking For Anyway But When It Came To Someone Who Just Didn't Know Fry's Locations Developed A Reputation As Just Not Being Very Helpful Or Even Very Friendly In The Late 90s A Lot Of Fry's Because Every Time They Did They Felt Like They Weren't Even Wanted There It Wasn't A Welcoming Atmosphere For The Average Person It Felt Very Elitist And You Know Well An Average Person Doesn't Know About Computers I Know More Than Them That's That's Really Sweet If You Want To Be A Successful Company You Actually Kind Of Have To Appeal To The Average Person That's What That's What Average Means Average Means The Majority Of People And The Majority Of People Don't Necessarily Recognize Individual Computer Components And You Should Probably Hire People That Are At Least Willing To Teach Or Help Someone And Fry's Just Didn't Turning Many Customers Away Who Would Prefer To Go To Best Buy Or Circuit City Or Anywhere Else Where The Staff Were Maybe Not Even More Knowledgeable But At Least More Helpful More Friendly And The Thing About Retail Is This It Takes Multiple Good Experiences To Create A Loyal Customer It Only Takes One Bad Experience To Create A Customer That Well Is No Longer A Customer It's Very Easy To Steer People Away From You Especially When There Are Other Options For What People Need In A Highly Competitive Market Where There's Other Stores The Last Thing You Want Is To Be Turning People Away Or Making Them Unhappy With Your Service And That's Exactly What Fries Was Doing For Years And I Don't Just Mean In Terms Of Shopping I Also Mean In Terms Of Refunds In 97 They Were Accused Of Having An Official Internal Policy That Was Identified As The Double H Which Translates To Hoops And Hurdles Directly Referring To Customers Trying To Get Refunds For Products They Didn't Want Or Were Defective Basically They Intentionally Designed Their Refund Protocols To Be As Difficult And Time Consuming As Possible So They Just Wouldn't Have To Give Them And Nobody Likes That Everyone Everyone Hates When You Do You If You Give A Proper Refund Especially When It Isn't Something That Is Your Fault A Customer Will Be Generally Inclined To Simply Spend That Money Immediately In Your Store Because They're Already There But If You Annoy The Heck Out Of Them They're Going To Get Out Of There As Quickly As Possible Then You Won't Make That Money Back Do You See How Stupid That In Front Of A Long Line As Long As They Paid A Fee To [00:44:27] Speaker 5: Capitalism [00:44:28] Speaker 2: Okay I'll Be Real With You I Actually Kind Of Applaud The Shamelessness Here But Naturally People Didn't Appreciate This Bad Press Soon Followed So Fry's Management Offered Anyone Who Had Paid The Fee Their Money Back In 2008 They Had To Pay A Fine Of $384,000 To The FCC Because Fry's Had Failed To Place The Required Analog Only Tuner Consumer Alert Label On Their Analog Televisions It Was So Rock Stupid Like Seriously And That Same Year Well I Mentioned Corporate Corruption Earlier Yeah There Was There Was That Going On Too Particularly With One Man Whose Name I'm Gonna Attempt And Probably Butcher But He's A Criminal So Whatever Osaf Umar Sidikui Or Sidikui Not 100% The Last Name Fortunately For Me He Actually Went By Omar Which Is Easy Enough For Me To Pronounce So Serious Problem He Had Addiction But He Obviously Needed More Money In Order To Fund Said Addiction How He Did This Was Through What Was Effectively Embezzlement He Negotiated With Suppliers For Fry's The Company To Pay Higher Prices In Exchange For Personal Kickbacks Which Could Total As Much As 31% Of The Total Cost Effectively He Was Funneling Fry's Money To Himself Through Their Suppliers He Set Up His Own Shell Company PC International To Facilitate This And Hid 65.6 Million Dollars In Kickbacks Dude Was Out Of Control And Wasn't Caught For Several Years But Like I Said He Was A Gambling Addict And Eventually Red Flags Started To Be Raised He Wired Transferred 70.4 Million Dollars To The Venetian Between 2005 And 2008 And He Became Quite Well Known They Called A Blackjack Machine They Explained That You Couldn't Deal To Him Fast Enough He Just Kept Going And Going Give Me The Cards Deal To Me Hit Me Hit Me Hit Me More You're 21 Sir HIT ME And He Was Very Bad At Gambling Just So We're Clear He Played So Much That He Eventually Lost He Never Walked Away Whenever He Was Up If He Was Ever Up At All He Spent 162 Million Dollars At MGM Grand Las Vegas And Las Vegas Sands And On Top Of The Gambling He Also Enjoyed The Regular Rich People Stuff Fancy Cars Models Of Expensive Champagne You Know The Usual Suit Nonsense And If It Were Just That [00:47:37] Speaker ?: That [00:47:37] Speaker 2: That Would Be Normal But It Was The Casino Stuff That Really Threw Everybody Off And When It Came To Fry's Internally An Employee Noticed That Omar Had A Bunch Of Confidential Spreadsheets Letters And Really High Commission Amounts On His Desk That Seemed A Little Sus When He Was Confronted Omar Claimed Well I'm Co-Owner Of The Company So It's Fine Which No No You Are Not He Was Inevitably Caught And He Would Be Sentenced To Six Years Fled Guilty To One Count Of Wire Fraud And One Count Of Money Laundering And In Exchange The Prosecutors Agreed To Drop Seven Other Felonies That He Was Accused Of So That Cost Fry's A Lot Of Money Over Many Years And That Was That Was Great That That's Wonderful And You'd Think That'd Be The End Of It But No This Is Fry's Electronics And They They Make Really Terrible Decisions Sometimes In September Of 2012 They Had To Pay 2.3 Million Dollars To Settle A Harassment And Retaliation Lawsuit Yeah 2.3 Million What Did They Do Uh Well It Was Pretty Terrible Actually The Lawsuit Was Brought By The U.S. Equal Employment Opportunity Commission And The Settlement Was In Relation To An Allegation Referring To An Assistant Store Manager At The Renton Location He Was Alleged To Have Arrassed A 20 Year Old Sales Associate By Sending Her A Bunch Of Really Really Really Really Just Gross Texts As Well As Constantly Inviting Her Over To His House To Drink With Him I'm Sure These Two Elements Combined Wasn't A Red Flag At All Naturally The 20 Year Old Sales Associate Kept Saying No To Him And Eventually Reported The Harassment To Her Direct Supervisor Took This Very Seriously And Reported It To Fry's Legal Department The Legal Department Responded By Firing The Sales Associate Who Was Being Harassed What And Then They Proceeded To Fire Her Supervisor Because Her Supervisor Stood Up For Her And Demanded That She Be Given Her Job Back Because Duh But No They Fired Both Of Them And Let The One Who Was Harassing The 20 Year Old Sales Associate Keep His Job Because That Somehow Made Sense To More Than One Person Within Fry's I Don't What And Yeah It Cost Them 2.3 Million Dollars But All They Had To Do To Settle This Properly Is You Know Fire The Person Harassing The Sales Associate Be Very Easy To Do There's Direct Evidence It's Going On Just Just Just Fire Him You You Wouldn't Lose Two Employees Two Good Employees You'd Be Getting Rid Bad One Also You Wouldn't Have To Pay 2.3 Million Dollars To Settle It Are You Kidding Me And One More Minor Issue That I Just Think Is A Bit Funny In 2017 The Store In Webster Texas Entered Headlines Because One Of The Managers Set Up A Display To Demonstrate Indoor Grow Lights For Sale That Sounds Innocent Enough Except They Used Realistic Looking Though Fake Marijuana Plays Guys Guys What Are You Doing They Didn't Really Handle Themselves Particularly Well In The Grand Scheme Of Things And Yeah They Started Losing Headway They Honestly Only Stayed Afloat So Long Because A They Still Had A Very Loyal Following And B They Just Weren't That Large The Fact They Only Had Around 30 Stores Matter The Cost Their Overhead Wasn't Nearly As High As Others But They Still Went Under According To Them It Was COVID-19 As Well As Changes In The Retail Industry Which I Translate As Code For Everyone Is Buying Their Components Online Now And Yeah That's Probably It Most People Just Stopped Going To Fries They'd Rather Go To Newegg Or Even Amazon The Online Market Really Knee Capped Them As It Did A Lot Of Companies But Fries In Particular Was Vulnerable To It Because What They Were Known For Was Something That Was Very Easy To Sell Online Smaller Components It's True They Were In Other Markets Things Like Cosmetics And Even Household Appliances Which Is Great But They Weren't Necessarily Known For Those Things And I Think That Was The Problem They Didn't Advertise Those Elements Heavily Or Invest Heavily They Just Let Them Be An Option And The Whole Thing About Appliances Especially Appliances Actually That People Really Like Sales Associates To Explain Appliances And Sell Them On Them Explain Why They Would Want Them Like Circuit City Used To Do Back When They Were Actually Paying Their Workers Properly They Were Really Good At That Fries Was Never Good At Customer Service So The Appliance Market Was Difficult For Them To Get Into When No One Was Really Buying Appliances From Them Because They Were Just Awful At Talking To People But When They Suddenly Went Under It Took Quite A Number Of People By Surprise And Admittedly Over 10,000 People Were Suddenly Out Of A Job So It Is Unfortunate Either Way Whether Or Not It Could Have Been Avoided I Not Really Sure They Could Have Reoriented Themselves Into Better Markets I Think The Biggest Problem Was Not Getting The Brand Online Quick Enough And Making It Known That It Was Their Brand They Could Have Been A Serious Competitor To Newegg On The Online Front They Just Didn't And As Such They Were Driven Out Of Business Starting The Process Of Liquidating All Their Remaining Assets On April 2nd 2021 The Real Question Now For Some Of You Is Will They Ever Come Back And I Doubt It But It's A Bit Too Early To Say Plenty Of Brands Have Reemerged After A Decade Or Two So It's Not Impossible But Given The Nature Of The Market At This Point I Don't Think It's Very Likely [00:53:46] Speaker 3: This Little Celebration Is Brought To You By The People Who Help So Many Other People Understand And Enjoy Cellular Phones Radio Shack America's Number One Retailer Of Cellular Phones Surprised We're Not We're Just Happy Radio Shack You've Got Questions We've Got Answers [00:54:16] Speaker 2: Radio Shack You've Probably Heard The Name Before As Once It Was One Of The Most Prevalent Electronics Retailers But In More Recent Years They Suffered A Significant Decline And Now You Might Struggle To Find Them What Happened Did Walmart Kill Another Person Now Now This Was Again Somewhat Self Inflicted And I Say Somewhat Because It Wasn't All Radio Shack's Fault A lot Of Their Problems Had To Do With Just The Passage Of Time And Not Being Able To Adapt To The More Modern Marketplace A story We've Heard Often Enough But [00:55:00] Speaker ?: But [00:55:00] Speaker 2: We've We've So We're [00:55:00] Speaker ?: We're [00:55:00] Speaker 2: More Unique Twists And Turns Involving Radio Shack That Perhaps You Aren't Overly Familiar With And Before We Proceed It's Important To Understand That Radio Shack Is A Little Bit Different From Previous Chains We've Discussed While Both Circuit City And Kmart Could Be Described As Big Box Outlets Radio Shack Was Never That Large In Terms Of Their Store Layouts They Were Always More Like An Outlet Location Smaller Establishments That Have A Very Focus Niche Product Line In Radio Shack's Case Was Electronics But Generally A Lot Smaller Electronics In Terms Of What Selection Depends On What Era Of Radio Shack Were Discussing But Unlike Circuit City In Which You Could Walk In And Find Big TVs Game Consoles And Things Like That Radio Shack Focused On The Small End Of Things Generally Speaking And That's Just Simply Due To Space But That Worked Well For Them For Many Years And By Many Years I Mean A Really Long Time The Brand Is Actually Over 100 Years Old If You Can Believe That The Company Dates All The Way Back To 1921 And It Was Founded By Two Brothers Theodore And Milton Deutschmann At The Time Radios Were A Brand New Technology And Were Becoming A Lot More Common Place The Idea Of Transmitting Sounds Long Distance Wirelessly Was An Interesting Concept And Would As You Can Imagine Develop Into A Massive Industry But The Thing About Radio Is That You Can Kind Of Make Your Own And Use It Yourself Thus The Field Of Amateur Radio So Then It's Called Ham Radio Started Becoming A Thing It's Generally Defined As The Non Commercial Exchange Of Messages Wireless Experimentation Self Training Private Recreation Really Whatever You Want As Long As You're Not Doing Like A Radio Show For Money Or Sending Messages For Military Purposes You're Doing Ham Radio The Brothers Felt That This Could Be A Lucrative Market Selling Radio Parts To Just Regular Old People Even If They Weren't Necessarily Doing It For Ham Radio They Might Actually Want To Do It To Fix Their Regular Radios So They Could Listen To Their Favorite Shows Because Remember This Was Before TV Radio Would Become For Several Decades Before We Worked Out How To Send Actual Pictures Long Distances And Television Took Over The Brothers Initially Started With A Single Store For Retail Purposes As Well As A Mail Order Operation In Downtown Boston At 46 Brattle Street The Name Radio Shack Was Actually In Use Prior To The Company That Term Is Also Used To Refer To A Small Wooden Structure That Housed A Ship's Radio Equipment Or Really Any Radio Equipment Since They Were Focused On Radios Naming The Store That Seemed Like Made A Lot Of Sense But The Brothers Did Not Come Up With It On Their Own That Was Suggested By An Employee Of Theirs Named Bill Halligan Who Would Go On To Form His Own Company Called Halicrafters Which Also Worked On Radio Equipment Even Today Ham Radio Operators Tend To Use The Term Radio Shack To Describe Where They Have Their Radio Equipment Not Necessarily The Store Either Way It Was A Really Good Name Because It Denoted What They Were Selling Radio It's Right There And Even In Later Years To Today Radio Is Still Associated With Electronics So Once They Started Branching Out And Selling Other Things People Still Knew What They Were All About Right There In The Name It Was Good For Branding They Would See Some Slow Growth Over The Following Decades And Would Issue Their First Ever Catalog In 1939 When They Started Pushing Into The High Fidelity Music Market High Fidelity Is High Quality Reproduction Of Sound Closer To What We Would And They Would Continue To See Growth In 1954 They Began Selling Their Own Private Label Products Under The Brand Name Realist Though They Had To Change That See Turns Out There Was A Brand Of Stereo Cameras Called Stereo Realist And The Makers Of That Did Not Appreciate Them Using The Term Realist As Such They Opted To Change The Brand Name To Realistic Not Realist Which Whatever And Even In The Early Days There Were Still Some Jokes About Radio Shack See Some Customers Referred To Them As Nagasaki Hardware The Reason For This Is That A Lot Of Their Merchandise Was Sourced From Japanese Manufacturers And Back Then Japan Was Perceived As A Source Of Low Quality And In Expensive Parts Kind Of Like How We'd See Made In China Today It's Kind Of Funny In Retrospect Because Today Generally When It Comes To Electronics Japan Is Seen As More High Quality I Mean There's A Lot Of Electronics Companies Over In Japan And Most Of Them Make Pretty Decent Stuff Nowadays But Back Then That Wasn't The Perception Still They Continued To Grow At Least Until The Early 1960s They Had Nine Stores Plus An Extensive Mail Order Business But Shack As Such They Began To Lose Money And Were In Danger Of Entering Bankruptcy That's When The Tandy Corporation Stepped In Now Tandy Originally Had Nothing To Do With Electronics They're A Family Owned Leather Goods Company Founded In 1919 By The End Of The 1950s They Had Expanded Into The Hobbyist Market Which Is Something That Radio Shack Was Already A Part Of Because Of The Whole Radio Thing Tandy CEO Charles David Tandy Thought There Was A Lot Of Potential In Radio Shack It Was A Good Name With Storefronts Already In Existence They Just Needed Extra Funding And Better Marketing Tandy Thought This Might Be A Good Way For His Own Company To Profit In A Market They Would Otherwise Not Really Be In In As Such He Purchased Radio Shack In 1962 For $300,000 The Initial Strategy That Tandy Pushed For Was To Appeal To The Market That Radio Shack Was Already Kind Of [01:01:17] Speaker ?: In [01:01:17] Speaker 2: Hobbyists But More Intrinsically He Wanted To Make Sure That The Staff In Radio Shacks Knew Electronics They Had To Be Experts In The Field So If A Customer Had Legitimate Questions The Staff Should Have Legitimate Answers It Was A Highly Specialized Approach But Very Effective Because Radio Shack Over Time Developed A Reputation As Having Staff That Well Knew What They Were Talking About They Would Be Able To Offer Solutions To Problems And Even If A Customer Didn't Necessarily Know What Product They Needed But They Had The Problem The Employee Would Likely Know What Product Would Actually Solve That Problem Tandy Shut Since They Had Been Unaffected However They Kept A Lot Of The Bottom Tier Personnel The Sales People The Merchandisers The Advertisers The People Who Knew The Products Inside And Out The Expert The Ones Doing The Good Work Tandy Kept They Also Began To Remove Unprofitable Merchandise Options From The Locations Originally Their Product Line Was Extensive Numbering In The Tens Of Thousands But They Cut It Down To Just 2,500 Because Tandy Was Looking To Identify The 20% That Represented 80% Of The Sales Basically They Only Wanted To Carry The Stuff That People Were Actually Buying Why Carry Something If It Wasn't Selling You Would Never Make Any Money Off Of It It It Deal But Tandy Shrunk Them Down To The Little Hole In The Wall Type Of Outlet Style That We're More Familiar With And They Tended To Rent A Lot Of Locations Not Buy Them These Were A Lot Easier For Them To Close Down And Reopen In Different Spots If A Particular Location Didn't Work Out While The Mail Order Business Had Been Unprofitable It Did Give Tandy Valuable Customer Data Namely The Shipping Information They Knew Where People Were That Were Actually Buying From Radio Shack Therefore They Knew Where It Was Logical To Build New Radio Shack Retail Outlets Because They Knew Customers Lived There And Would Glad They Go To An Actual Store If One Was Close Enough Tandy's Whole Business Idea When It Came To Radio Shack Is That They Weren't Looking For A Person Who Would Want To Spend All Their Money On A Brand New Sound System They They Wouldn't Have To Make Any Changes To They Were Looking For The Customers That Wanted To Save Money By Buying Cheaper Stuff But Improving That Stuff Through Modifications And Charles D Tandy's Ideas Genuinely Worked Radio Shack Started To Grow Again And Become Very Popular Into The 1970s Though Sadly He Would Pass Away At The Age Of 60 Of A Heart Attack In 1978 But In 1982 There Was Another Opportunity For Radio Shack To Start Making Money And That Was With Telephones See That Year The Bell System Which Basically Had A Monopoly On The Telephone Industry For Decades Was Broken Up Prior To That People Didn't Actually Own Their Own Telephones Generally They Would Rent Them From Local Phone Companies Which Sounds Really Weird To Us Now I Know But That's The Way It Worked But When Bell's System Was Broken Up Things Changed And People Started Wanting To Own Telephones As Such Radio Shack Could Offer A Bunch Of Different Models Of Phones For People To Actually Starting In The 1960s Was Known As The Battery Of The Month It Was A Kind Of Rewards Club Where Basically Customers Would Get A Wallet Size Cardboard Card This Card Would Allow Customers To Get A Single Free Enercel Battery Per Month In Store It Sounds Weird To Just Get A Single Battery That Way But Also It Was A Free Battery And Yeah Sure Why Not Batteries Are Kind Of Expensive Even It [01:05:14] Speaker ?: Is [01:05:14] Speaker 2: Just One It Is Still A Free Battery And It Drew In Foot Traffic Into The Store For People To Buy Other Things In A Similar Manner To Kmart's Blue Light Special The Cards Were Also Effective As Generic Business Cards For The Sales People They Could Use Them For That But The Customers Were More Inclined To Keep Them Because They Could Get A Free Battery And That Promotion Was Carried Forward Until The Early 1990s The Longest Running Product That Radio Shack Ever Sold Was Well Go Figure A Radio I Don't Know What You Expected It Was An AM Only Radio Known As The Realistic Flavor Radio And They Sold Three Different Designs Of That From 1972 To The Year 2000 It Part Of The Time It Was The Last AM Only Radio That Was Even On The Market As By That Point Pretty Much Every Other Kind Of Radio Had FM As An Option In The Late 70s They Also Started Dabbling Into The Home Computer Market Introducing The TRS-80 Which Was One Of The First Mass Produced Personal Computers They Were Pretty High Priced Even By The Standard At The Time Retailing At $600 Which Is A Little Over $3,000 Today And They Weren't Even That Capable Computer Which Was Designed To Attach To A Television Which Was Not An Unusual Design Element Back Then Over The Years They Would Sometimes Partner With Other Companies To Sell Their Computers Like IBM As Well As Compaq But Overall For A Long Time It Was A Lucrative Business Venture As Computers Were Getting Very Popular And Radio Shack Was Electronics Computers Are Electronics It Made Sense By 1990 Tandy Was The World's Biggest Manufacturer Of Personal Computers They Were Building Hardware For Digital Equipment Corporation Grid Olivetti AST Computer Panasonic Just To Name A Few They Manufactured A Lot Of Different Stuff Beyond Computers As Well They Handled Store Fixtures Computer Software Wires Cables Antennas Audio Videotape Whatever They Were Doing It All In The Early 90s And At One Time Radio Shack Was Indeed The World's Largest Electronics Chain But In 1991 Things Started To Shift Unfavorably For The Radio Shack Brand Not To A Degree That Was Necessarily Catastrophic But There Were A Lot Of Decisions That Tandy Made About This Time That Didn't Necessarily Work Out For The Best For One Thing In June Of 1991 They Closed Or Restructured 200 Of The Radio Shack Computer Centers They Also Acquired Computer City And Tried To Shift Its Emphasis Away From Components Toward More Mainstream Consumer Electronics They Also Sold The Computer Manufacturing Business Which Remember Was Huge To AST Research In 1993 They Also Sold Off The Memorex Consumer Recording Trademarks To A Firm Over In Hong Kong And Divested A Lot Of The Remaining Manufacturing Divisions I Don't Know Why They Were This Because That Was Probably One Of The Best Elements About Them They Were Making Their Own Stuff A Lot Of The Time Or Making Other People's Stuff And Selling It To Them And They Were Like You Know What No We Don't Like Making Money That's Bad Let's Just Sell It Off And Make Quick Money Now And Not Make Any More Money Later That's It's Great That's Exactly How You Kill A Company But It's Fine Just Keep Doing That As a Result Of These Decisions A lot Of The Core Brand Products That Radioshack Was Able To Mark Up Heavily Because They Were Making Them Therefore They Didn't Have To Buy Them From Anybody Else In The First Place They They Were Theirs So They Had A Really Good Profit Margin Had To Be Replaced With Third Party Brands That Caused Two Problems A Those Third Party Brands Were Already Readily Available From Direct Competitors To Radio Shack And B They Had Reduced Profit Margins So Radio Shack Wasn't Making As Much Money In 92 Tandy Also Tried To Get Into The Big Box Market Like With Kmart And Walmart Except In Their Case They Were Pushing For The Electronics Part Of That Market So Best Buy In Circuit City But They Called Theirs Incredible Universe More Stuff More Savings More Fun What Kind Of Branding Is That Even For The 90s This Is God Awful I'm Sorry You Tell Me What This Store Is Supposed To Be Before I Did My Research I Thought This Was Some Kind Of Kids Indoor Amusement Park Like Chuck E Cheese Is What It Looks Like Would You Ever Assume This Was An Electronics Big Box Outlet If I Didn't Just Tell You It Was No You Wouldn't They Opened 17 Stores Under The Name But Never Ever Turned A Profit Only Six Of The Stores Were Individually Profitable And Those Were Sold To Fry's Electronics In 1996 With The Others Being Closed They Tried Other Rebranding Options Which Included The Launch Or Acquisition Of Other Chains Like McDuff Video Concepts And The Edge In Electronics And They Were Supposed To Be Larger Outlets That Carried Things Like TVs And Appliances Again Like Best Buy Or Circuit City Radio Shack As A Brand Was Always Meant To Be Small And They Didn't Think Making A Giant Radio Shack Was Necessarily A Good Idea Because That's Not What People Expected From Them And I Do Agree With That Logic But Any Attempt To Break Into The Big Box Market Just Didn't Seem To Work Out In This Case Tandy Closed Down The McDuff Stores At The Same Time They Sold Off Incredible Universe But Radio Shack Was Still Doing Okay They Weren't Doing As Well As They Had But They Were Still Doing All Concentration You Don't Want Two Stores Of The Same Kind Like Right Next To Each Other If You Own Them Both Because They're Going To By Default Bleed Each Other You Can Wind Up In A Situation Where You're Paying Too Much For Overhead And Neither Store Is Turning A Profit Where If It Was Just One The Overhead Would Be Lower And You Would Be Making Money Radio Shack Had This Problem A Lot Because They Kept Opening So Many Different Locations And Not Closing The Ones That Weren't Working Out Fast Enough Another Thing That Started Changing To The Late Nineties Was The Existence Of The Internet You'd Think A Place Like Radio Shack Would Jump Right On Any Kind Of New Technology But Like A Lot Of Places They Dragged Their Feet In This Department While The Kind Of Parts That Radio Shack Was Known To Sell Started To Become Available From Retailers Online They Themselves Would Not Have A Storefront Online Until The Early 2000s And Even When They Did Do It Their Selection Was Exceedingly Limited Online When Compared To A Brick And Mortar Store As Such No One Would Buy From Radio Shack Online When Compared To Their Competitors Because Why Would They Their Competitors Just Had More Available But They Didn't Make All Bad Decisions During The 90s In 94 They Introduced A New Service Called The Repair Shop At Radio Shack Which Was Designed Specifically To Provide Inexpensive Out Of Warranty Repairs For A Bunch Of Different Brands Of Electronic Equipment This Was Very Appealing To Customers A Lot Of Them Didn't Necessarily Know How To Fix Some Of Their Old Electronics But The Radio Shack Experts Could And The Thing About Radio Shack Was They Had A Lot Of Extra Parts That They Had No Hope Of Selling Over One Million Sitting Around In Warehouses Instead Of Scrapping Them Or Throwing Them Out They Decided To Leverage Them For Their New Repair Business As Sometimes Customers Would More Willing To Spend Money On A Part If They Actually Knew It Could Fix Something That Was Broken Many People Just Didn't Know What They Needed To Fix Their Electronics But The Radio Shack Repairmen Did And They Could Use Parts That The Company Already Owned To Provide A Relatively Cheap Repair Job The Consumer Was Happy And Radio Shack Made Some Money Off Of A Part Most Of You Probably Actually Remember Which Is You've Got Questions We've Got Answers It Wasn't A Bad Slogan I'm Not Gonna Lie You Remember It I Remember It So Hey It Works Somewhat And They Changed Their Logo From Radio Shack To Radios Hack Okay It's Still Pronounced Radio Shack They Just Removed The Space And In 96 They Were Able To Successfully Petitioned The U.S. Federal Communications Commission Or FCC To Allocate Special Frequencies For The Family Radio Service You Know Those Short Range Walkie Talkies That You Probably Used Those Frequencies Are Only Allocated For Use There Because Of Radio Shack Which Was Both A Really Good Thing For The General Public And It Let Them Sell Short Range Walkie Talkies Which Turned Out To Be Very Popular It Was A Good Deal During The Middle Of The Nineties Radio Shack Was Trying To Push Into More Mainstream Consumer Markets They Didn't Want To Necessarily Just Be A Parts Dealer Anymore They Wanted To Sell More Pre-built General Merch Kind Of Stuff Like Big Box Stores Did But Radio Shack Didn't Have As Much Space As Them They Had To Pick And Choose The Products They Had Carefully And This Is They Started Pushing Wireless Phones Now That's Great And All But A This Removed A Lot Of Their Parts Inventory Because They Need Space For The Phones And For Two This Put Them In Direct Competition Against Big Box Vendors Like Best Buy And Even Walmart Had Wireless Phones Available That Was Dangerous Territory For Them To Get Into Because Remember They Are Not A Big Box Store They Are An Outlet At Best Don't Poke The Bear Guys And In May Of 2000 The Company Actually Dropped The Tandy Name All Together Because The Radio Shack Division Was Pretty Much The Only One That Anyone Knew Anymore So They Changed It To The Radio Shack Corporation Tandy Tandy's Original Leather Operation Were Sold To The Leather Factory On November 30th 2000 Which Honestly In retrospect Was Probably A Mistake Because That Business Remains Profitable Even Now Why Are You Selling Things That Are Making You Money What Is Wrong With You The Only Thing I Can Imagine Is That The People In Charge Wanted Quick Money And Didn't Want To Wait For It Which Is Such A Rookie Mistake In Business Never Do That Whenever You're Running A And Follow Me On This You Want To Consider The Future Far In The Future You Want The Company To Exist 10 20 30 Years Down The Road Because In That Span of Time If You Are Profitable Every Single Year You're Going To Make Way More Money In The Long Run Than The Immediate Sale You're Doing Now But No Just Sell Off The Profitable Business Make Some Quick Money And Run For The Hills Yeah Okay Great Real Talk For A Second If You Do That You're A Bad CEO I'm Just Saying And Because They Had Thrown Away Their Manufacturing Facilities In The Early Nineties The Vast Majority Of Their In-house Brands Were Gone They Tried To Revive A Few Of Them In The Early 2000s But That Was Met With Mixed Success Because By That Point A Lot Of People Didn't Even Recognize The Brands And They Weren't At The Quality They Once Were Online Competition Was Also Ramping Up As You Can Imagine By The Other 2000s The Internet Was Getting Faster Into More Common Usage And A Lot People Were Shopping Online Radio Shack Started Feeling The Squeeze In That Regard They Themselves Invested 35 Million Dollars Into The Concept Now What The Heck Is A Q Cat Is That A Barcode Scanner That Looks Like A Cat Well Yes But It Had A Very Special Purpose They Were Given Away Free To Internet Users In The Year 2000 And The Point Was That You Could Scan A Unique Barcode And It Would Cause The Computer To Go To A Web Page Purely Based Off The Barcode Without Actually Having To Type In A URL And I'm Sure Most Of You Are Thinking To Yourself Wait You Mean A QR Code And No But Same Idea Actually And On Paper It Sounded Great But It Was Before Its Time The Reason QR Codes Even Work And Are Utilized Is Because Smartphones Exist And You Can Just Scan Them With Your Phone Reading A Newspaper While You Were On The Internet Which What You See The Problem Here And You Couldn't Like Put The Barcodes Anywhere They Had To Be In Places Where You Could Take Them And Actually Use Them In The Computer Because [01:18:13] Speaker ?: It [01:18:13] Speaker 2: Was A Wired Connection Again Smartphones You Have Them In Your Pocket So If You See A QR Code In A Poster You Could Just Use It There With Your Phone The QCat Could Never Do This And It Was A Complete Failure Radio Shack Issued Their Last Annual Printed Catalogs In 2003 Which In Their Defense Was Probably A Good Decision That Was About The Time Where Such A Thing Was Probably Obsolete But As The 2000s Wore On Things Only Got Worse And Worse In A Lot Of Ways They Did Verizon For A 10 Year Agreement With Singular Later Known As AT&T And Renegotiated Their 11 Year Agreement With Sprint 2005 Was In Fact A Banner Year For Wireless On Radio Shacks That Year They Sold More Mobile Phones Than Walmart Circuit City And Best Buy Combined They Were Doing Really Well In The Mobile Phone Market But That Wouldn't Last The iPhone Would Be Introduced In 2007 You're Probably Confused Why Would The iPhone Affect Phone Sales Wouldn't That Help No Because The Way People Purchased Their Phones Changed Back In The Day The Flip Phones On Their Own Actually Weren't That Expensive In The Grand Scheme Of Things But Smartphones Were But Everyone Wanted A Smartphone So If You're A Phone Manufacturer How Are You Going To Get More Of These New Fangled Why Yes Yes Exactly What They Did As Such Many People Bought Their Phones Through The Wireless Operators And Payment For Those Phones Was Included In The Plan As I'm Sure Most Of You Know If You Go To Say Verizon Sprint Or Whatever And You Want A Phone They'll Provide You With A Plan That Effectively Up Charges Your Monthly Rate So You Can Pay Off The Phone You Might Actually Want A New Phone But Regardless The Effect Here For Where Radio Shack Is Concerned Is That Most People Stopped Buying Standalone Phones They Would Just Get Them With Their Plans Radio Shack Didn't Really Sell Plans At Least Not Directly They Did Have Some Store Within A Store Setups Involving Both T-Mobile And Verizon But That Was About It People Would Start Going That Was The Problem It Wasn't The Problem Your Branding Was Never The Problem The Radio Shack Name Is A Good Name That's Not The Issue The Issue Is What You Are Selling Anyway They Opened Three Concept Stores Under A New Name Called Point Mobile Which Was To Sell Wireless Phones As Well As The Services Necbooks iPods And GPS Navigation Devices If That Sounds Like The Kind Of Stuff They Would Sell In A Regular Radio Shack It's Because It Was The Plan Was If It Was Successful They Would Start Converting Radio Shacks To Point Mobiles In Certain Markets Where Radio Shack Wasn't Doing So Well The Test Wasn't Successful Point Mobile Was Not Profitable And The Whole Thing Was Abandoned In March Of 2011 Oh Oh Yeah By The Way In August 2009 And You're Gonna Love This Cause I Know I Do Radio Shack Tried To Rebrand Itself Do You Know What They Started Calling Themselves Do You Want To Know They Called Themselves The Shack Thanks I Hate It This Is Just Like When Circuit City Started Calling Themselves The City What Is The Shack Even Mean The Word Radio Was Very Descriptive As To What You Sell Which Is Consumer Electronics Just Like Circuit City Was You Dropped The One Part Of Your Name That Telled Everybody What You Were Selling And What The Shack You Know The Word Shack On Its Own Is Actually Kind Of A Bad Name Like It Denotes A Shack A Dingy Sloppily Put Together Wooden Structure Which Admittedly Is Not A Bad Description In Terms Of Your That Technically Speaking The Rebranding Did Cause An Increase In Sales Of Mobile Products But Their Other Product Lines Took A Significant Hit Because Well Do You Even Sell Radio Stuff Anymore I I [01:22:43] Speaker ?: I [01:22:43] Speaker 2: Mean Yeah They Did They Sold The Same Stuff They Always Did But You Weren't Telling People That And Ham Radio Operators Didn't Want To Go To A Place Called The Shack Why Did Both Circuit City And Radio Shack Do The Same Thing I Don't Know To Me This Is Just like Walmart Changing Their Name To Just The Mart Or Kmart Changing Their Name To Just For A Long Time Saw A Significant Slow Decline In Their Overall Morale As Well As Happiness With Their Jobs In General They Had Started Working At Radio Shack Because They Wanted To Sell Radio Parts And Electronic Parts It Was Fun It's Where They Were Experienced But As The 2000s Wore On Radio Shack Management Pushed Into The Wireless Department As Well As Add Ons For That And The Pressure To Sell Sell Sell Sell Gradually Increased High Stress Was Common Among Their Employees And Since All They Cared About Was Sales Focus On Training New Employees As Well As Making Sure They Even Knew What They Were Selling Decreased And A Lot Of The Old Employees Had Been Paid Bonuses As Well As Their Retirement In Stock Options Which Isn't Necessarily A Bad Thing If Your Company Is Doing Well But Because They Were Starting To Fail Those Employees Saw Those Benefits Decrease And Fade Into The Ether If You're Wondering What The Heck Upper Management Was Doing Making All These Ridiculous Decisions Well To Be Honest Upper Management Barely Existed Half The Time Because Between 2005 And 2014 Radio Shack Changed Their Chief Executive Be Anywhere I Don't Care What It Doesn't Really Matter You're Working There And Your Boss Changes Now Isn't That Annoying You Have To Get To Know This New Person Work For Them They Probably Do Things In A Different Way Than Your Old Boss And They May Just Not Like You Management Changes Are Always A Pain Of The But For Lower Level Employees And That Only Gets Worse The Larger A Company Gets Because Once A Company Hits A Certain Size The People At The Top Don't Necessarily See The People Down Below Unless They Make An Actual Concerted Effort To Do So But Regardless Of How Far The Distance Is As One Of My Old Managers Used To Tell Me Stuff Rolls Down Hill Except He Didn't Use The Stuff But If You Know And He's Right Decisions Up Top Always Affect The People At The Bottom And When Those Decisions Involve Changing Who's In Charge Seven Times In Just A Few Years That Gets Pretty Old Pretty Quick And The Company Had No Way Of Reorienting Itself Under These Conditions You Can't Change CEOs That Many Times And Expect Things To Work Out Because Each One Had A Different Idea For How And When That Didn't Work Out They Removed The CEO Replaced Them With Somebody Else And Then They Pulled The Company In A Different Direction They Never Made Any Progress Anywhere And Starting In 2012 They Were In The Red They Were Losing Money And They Continued To Lose Money At An Alarming Rate In Order To Stay Afloat They Needed More Cash So In December Of 2013 They Took Out A Bunch Of Loans Which Okay So Loans Can Work Out As Long As The Company Plans On Actually Making Money In The Future And Has A Way Of Doing So They Obtained A 585 Million Dollar Line Of Credits From GE Capital And A 250 Million Dollar Term Loan From Salus That Second Loan Came With The Condition That Radio Shack Couldn't Close More Than 200 Stores Per Year Without Salus Consent And This Is Very Relevant Because Again These Are Loans Or Credit Whatever The Point Is They Have To Pay That Money Back These Aren't Grants These Aren't Gifts You Need To Pay It Back At Some Point But Radio Shack Didn't Fix Their Profit Situation In Fact Everything Kept Getting Worse In 2014 They Were Burning Through Money Faster Than They Ever Had Before And As A Direct Result They Tried To Close Down A Quarter Of Their Stores Because They Weren't Profitable But Salus Didn't Want Them To Do That And They Literally Weren't Allowed To Based On The Loan Terms Salus Didn't Think That Radio Shack's Future Prospects As Well As Their Business Plans Would Actually Succeed And That Decision Accelerated Their Will Generally Actually Make Money Because Everyone Spending Money For Gifts Radio Shack Barely Made Any Money That Holiday Season It Was Kind Of Embarrassing It Hard To Imagine What They Would Have Expected Because They Had No Experienced Staff Left A Lot Of Them Had Left And The New People Didn't Know What They Were Doing The Exodus Started All The Way Back In 2004 When They Introduced What The Is Does The District Management Like You No You Suck Like That's That's How That Works It's Not Actually Looking At Data From The Stores The Managers Were Given A 90 Day Period To Improve And A Total Of 1,734 Managers Were Reassigned As Sales Associates Or Terminated Over A Six Month Period It Was About That Time That They Canceled The Employee Stock Purchase Plan So That Was No Longer An Option For Them Also They Wouldn't Have Wanted It Anyway Because It Was Doing Nothing But Going Down By The First Quarter Of 2005 The Metrics Of Skill Assessment Used During Fix 1500 Had Already Been Thrown Out The Window And The Corporate Officer Who Created The Program Had Actually Resigned It Didn't Help And In 2004 They Also Suffered A Class Action Lawsuit For More Than 3,300 Current And Former Managers Of Their Stores Who Claimed That The Company Had Required Them To Work Long Hours Without Any Kind Of Overtime Compensation The Company In Another Way Of Making Themselves Look Even Worse Tried To Suppress This Launching A Successful Strategic Lawsuit Against Public Participation Directed Against Bradley D Jones Who Was The Webmaster Of A Site Known As Radio Shacks Sucks Dot Com He Wasn't Just Any Random Person Either He Had Been A Radio Shack Dealer For 17 Years So He Knew The Kind Of Stuff They Been Pulling All This Nonsense Culminated In 2015 When On January 15th It Was Reported By The Wall Street Journal That Radio Shack Had Delayed Rent Payments To Some Of Their Commercial Landlords On February 2nd 2015 They Were Delisted From The New York Stock Exchange After Their Average Market Capitalization Remained Below 50 Million Dollars For Longer Than 30 Consecutive Days Just The Following Day February 3rd Radio Shack Would Default On Their Loan From Salus Capital After These Reports Came Out Some Of The Employees Were Instructed To Reduce Prices As Well As Transfer Inventory Out Would Actually Remain Open While A Lot Of Other Stores Remained In The Dark As To Their Future A Lot Of The Locations Already Closed Down Without Any Kind Of Warning On Sunday February 1st Which Was The First Day Of Their Fiscal Year Employees Of Those Locations Were Only Given A Would Have Otherwise On February 5th Radio Shack Finally Announced That They Had Filed For Chapter 11 Bankruptcy Protection The Bankruptcy Filing Allowed Them To End Contractual Restrictions That Required Them To Keep A Lot Of Those Locations Open And They Immediately Published A List Of 1,784 Different Stores That They Intended To Shut Down And They Hoped To Do This Quite Quickly They Wanted Most Of The Stores Closed By The End Of February Which Would Avoid A 7 Million Dollar Rent Payment Ode In March At First Radio Shack Only Gave Customers Until March 6 To Return Merchandise Or Redeem Unused Gift Cards But There Was Legal Pushback On That From The Attorneys General Of Several Different States Radio Shack Decided To Be And Alarmingly Though It's A Story We've Heard Often Enough They Were Criticized During This Time For Putting The Personal Data Of Many Of Their Customers 67 Million Of Them Up For Sale As Part Of Their Assets This Was In The Face Of Their Long Standing Promise To Customers That [01:31:54] Speaker ?: That [01:31:54] Speaker 2: Data Would Not Be Sold For Any Reason At Any Time The FTC And The Attorneys General However At A Greatly Reduced Price Which You know Honestly I don't Think That's Any Better It's Arguably Worse Because Oh You're Still Giving Away People's Data But The Person Buying It Is Now Having To Pay Less Like No No No No The Problem Was Selling The Data In The First Place If You're Gonna Do It At Least Make It Really Expensive You Know I Guess Maybe Their For Whatever They Want You Know Like On March 31st 2015 The Banker Seek Court Approved A 160 Million Dollar Offer By The Standard General Affiliate General Wireless Operations Incorporated To Gain Ownership Of 1,743 Radio Shack Locations As Part Of This Arrangement The Company Entered Into A Partnership With Sprint And Established Store Within Store Areas Denoted To Selling Its Brands Man Do I Just Hate The Store Within Store Thing How Many Times Have I Talked About This Already On These Videos I Feel Like Store Within A Store Like Unless It's Food Like The Starbucks In Target Or Something Just Doesn't Really Work Out Long Term Maybe In Some Cases But A lot Of These Seem To Be Done Out Of Desperation More Than Anything And Mind You This Particular Acquisition Didn't Actually Include Rights To Radio Shack's Intellectual Property Their Franchise Locations As Well As The Customer Records Which Were Being Sold Separately Like I Said The Rebranded Locations Were Soft Launched On April 10th 2015 With A Preliminary Conversion Of The Store's Existing Wireless Departments To Exclusively Push Only Sprint Brands Later They Would Do A More Intensive Remodel To Make Extra Room For Sprint General Wireless Would Go On To Obtain The Radio Shack Name As Well As The Rest Of The Assets For $26.2 Million Dollars In May Of 2015 And The Chief Marketing Officer Michael Tatelman Hammered Home The Point That The Company That Had Emerged With The Proceedings Was An Entirely New Entity Despite Sharing The Name They Viewed It As A Whole New Thing Referring To The Original Radio Shack That It Existed For Nearly A Century Defunct Despite This Adorably So They Couldn't Actually Make This Brand New Definitely New Not At All The Same We Promise Radio Shack Profitable It Was Speculated In March Of 2017 That General Rialis Was Looking To Take Radio Shack Through Their Second Bankruptcy In Just Two Years Even Though They Pushed The Idea That It Was A New Entity It Was Still The Same Brand Whatever Is The Second Bankruptcy And Dozens Of Corporate Office Employees Were Laid Off 200 Stores Were Planned Wow Suspicious The Second Chapter 11 Bankruptcy Filing Happened On March 8th 2017 Of The Then 1,300 Remaining Stores A Few Hundred Were Converted Into Just Sprint Locations Not Being Radio Shack In Any Way And Even Though They Had Declared Chapter 11 Bankruptcy And Not Chapter 7 Liquidation They Proceeded To Engage In Liquidation That That's What It Was They Started Getting Read Of All Inventory Supplies And The Store Fixtures And Even Auctioning Off Memorabilia From The Glory Days Of The Company On March 26th They Announced Plans To Close All But Just 70 Corporate Stores And Shift Their Business To Primarily Being Online Only Most Of The Stores Closed At The Memorial Day Weekend Of 2017 And Of Those Remaining 50 More Would Shut Down 2017 To Auction Off The Radio Shack Name And The Intellectual Property Bidding For This Would Conclude On July 19th When One Of Radio Shack's Creditors Kensington Capital Holdings Obtained The Brand And IP For 15 Million Dollars Also Kensington Was The Only Bidder No One Else Wanted Them General Wireless Themselves Would Exit Bankruptcy In October And Was Allowed To Retain Their Warehouse E-commerce Sites Dealer Network Operations And Up To 28 Of The Stores Under The New Ownership Radio Shack Started Shrinking Their U.S. Headquarters Operation And By September They Had A Staff Of Only 50 Individuals In July Of 2018 They Partnered With Hobby Town USA That Opened Up Some New Stores Known As Radio Shack Express Hobby Town Owners Got To Select Which Radio Shack Products They Would Carry Based On What They Knew About Their Customers And For A While That Was Actually A Kind Of A Lucrative Venture Radio Shack It Signed 77 Of Hobby Town's 137 Franchise Stores By November In November Of 2020 Radio Shack Was Sold Again This Time To A Group Called Retail E-Commerce Ventures ReV They Were Florida Based And Had Previously Purchased A Lot Of Other Defunct Retailers Like Pier One Imports Dress Barn Modelli Sporting Goods And Linen And Things And REV Handled Themselves In A Questionable Wanner For Example In December Of 2021 They Announced That They Would Use Part Of The Radio Shack Brand Name On A Crypto Currency Platform Yay I'm So Excited They Called It Radio Shack DeFi The Platform Would Allow Customers To Exchange And Really Swap Existing Cryptocurrency Tokens For A New Token Called Radio Through This New Platform Wonderful I Do Not Recommend This And Trying To Market For The Crypto Currency Thing Turned Into A Bit Of A Mess Because I Guess Everyone In Charge Of Radio Shack Is Just A Bunch Of Clowns As Far As I'm Concern I Don't Know What It Is About Suits Sometimes Like They Don't Hire Normal People Okay That Would Be Too Reasonable They Wind Up Hiring Just The Weirdest Individuals Because The Twitter Account For Radio Shack Which Yes They Have But Not The Good Kind The Bad Kind Because I Guess Someone Said Well There's No Such Thing As Bad Publicity And You Know What That's Not True That's Really Not True Bad Press Does Exist Because They Started Pushing Out Tweets With A Bunch Of Not Safe For Work Content And This Was All In An Effort To Attract Attention Towards The Cryptocurrency Platform Which By That Point Had Been Renamed Radio Shack Swap The Strategy Had Been Directed By The Chief Marketing Officer Abel Zupor Who As I Said Is Apparently Just A Giant Clown Dealers Had A Mixed Reaction Because Well It Made The Company Look Like A Bunch Of Freaking Idiots And Hobby Town USA Was Furious Because They Always Maintain A Squeaky Clean Image And They Proceeded To Terminate Their Relationship With Radio Shack Entirely Which Cost Them Just So Much Money Just Last Year March 2nd 2023 REV Announced That They Were Looking Into The Idea Of A Possible Bankruptcy Filing Which Would Be The Third Time Within Ten Years You've Done That With This Brand I'm Convinced You Just Can't Make It Work Anymore Oh I'm Sorry You Actually Were Making It Work Why Don't You Try More Cryptocurrency Oh Why Don't You Try Selling Radio Shack NFTs That Always Is A Good Way To Just Take Money From Idiots In May Of 2023 Radio Shack Was Bought Again By Unicommer Group Which Was A Company Based In El Salvador To Date There Are Around 400 Authorized Dealers In The United States They Still Exist But They're A Shell Of What They Were And Will Likely Not Ever Regain Their Dominance They Are Kind Of A Joke In Some Categories At Least When It Comes To America However They Do Have A Pretty Significant Presence Elsewhere And They Are Actually Seeing Pretty Decent Success Overseas The Brand Has Been Used In Several Other Countries Sometimes Under The Same Company Sometimes It's Just A Brand Thing A Spinoff Of The International Retail Operations Was Known As Intertan And They Operated Radio Shacks In Canada And The UK Intertan As We Discussed Was Purchased By Circuit City Who Then Wound Up Being Sued For The Use Of The Radio Shack Name And Lost All Those Stores Were Renamed The Company Owns 225 Locations In Mexico And Over 300 In Latin America And The Caribbean They're Actually Doing Quite Well In This Market And It's Likely Because Online Only Sales Haven't Exactly Taken Roots In The Same Way Down There As It Has Here In America The Brick And Mortar Layout Is Still Quite Popular As Is Ham Radio As A Hobby So In A South Of The Radio Shack Still Has Their Glory Days Even If It Is Technically As A Separate Entity From The American Version As They're Just Using The Brand But They Still Kind Of Handle Themselves In A Similar Manner It Just Happens To Work In That Market Whereas Here In America No No It Doesn't Work Nearly As Well And It Likely Will Continue Not To Some Stores Still Make Some Of Profit But They'll Never Be As Big As They Once Were I Don't Know Whether They'll Ever Be Gone Permanently It's Hard To Say But While At One Time You Could Find A Radio Shack In Every Single Mini Mall Or Outlet Depot Or Wherever You Don't Find Nearly As Many And That Sad Fact Is Likely To Remain [01:42:40] Speaker ?: Outlet