RadioShack CEO: Econ Recovery May Be Slower Than Many Hope
10 Setembro 2009 - 6:57PM
Dow Jones News
The U.S. economic recovery "may be slower than people are hoping
it will be," given the fact that former drivers of consumer
spending, such as access to home equity, are largely gone,
RadioShack Corp. (RSH) Chairman and Chief Executive Julian Day said
Thursday.
"Although the stock market and the press appear to see a
recovery, if not right around the corner, next year, it isn't clear
to me personally that there are a great many forces at work that
are going to necessarily have that happen," said Day, who added
that he is "genetically predisposed to be prudent about the
future."
Day's comments came during a Goldman Sachs investor conference,
which was broadcast on the Internet. It was a rare public
appearance by Day, who typically holds only one conference call a
year and hasn't generally attended investor conferences since
joining RadioShack three years ago.
Day said that after making sure the company is financially
strong, he has now turned RadioShack's attention to strengthening
and "contemporizing" the brand - emphasizing its strength in mobile
phones and its ability to help consumers connect devices, services
and applications.
He said it's too early to comment on the performance of
RadioShack's latest branding effort - ads that feature the nickname
"The Shack" and emphasize its mobile phones and other devices.
Broadly speaking, however, Day said RadioShack intends to have
three areas of focus in its 4,500 company-owned and 1,500
dealer-owned stores. First is the "legacy parts and pieces
business," or the kinds of connectors and gadgets that many
customers immediately think of when RadioShack is named. Second is
the area focused on "mobility" - wireless phones, netbooks and
other devices or services that help mobile people stay connected.
Third is an area focused on what Day called "end-user products,"
such as MP3 players, amplifiers or other products that reinforce
RadioShack as a place with new, innovative products.
Asked about competition from Best Buy Co.'s (BBY) Best Buy
Mobile stores, Executive Vice President of Marketing Lee Applbaum
praised the company as a "smart organization." Best Buy, like
RadioShack, understands that customers shopping for wireless phones
and other mobile devices seek a smaller store format with "a more
intimate, consultative approach" from employees, he said.
Many RadioShack customers consider its associates helpful and
knowledgeable, which is a strength in that format, he said.
Under an agreement for RadioShack stores announced Tuesday,
AT&T Inc.'s (T) ConnecTech will provide remote and in-home
installation and support services for televisions, home theater,
computers and home networks. Day said as RadioShack looked at
providing more service and technical support, it made sense to
partner rather than build its own service force. Building a force
would have required significant capital investment, as well as
"regional or local critical mass" that could generate enough
business to justify the fixed costs.
Under terms of the agreement, RadioShack associates refer
clients to ConnecTech, and the company retains an undisclosed
portion of the fee, he said.
Shares of RadioShack closed up 7.9% Thursday after Morgan
Stanley upgraded its rating on the stock to overweight from equal
weight. The shares lost 1% to $17.10 in late trading.
-By Mary Ellen Lloyd, Dow Jones Newswires, 704-948-9145;
maryellen.lloyd@dowjones.com