NEW YORK — RadioShack's new CEO Joe Magnacca has big plans to enhance the company's image. But is it too little, too late?
Magnacca, who stepped in in February, has been working to revamp stores and refresh RadioShack's image as the chain struggles to fend off competition from the likes of Amazon.com and eBay.com, reverse slumping sales and strengthen its balance sheet. To do that, Magnacca said the company is transforming about 220 of the company's 4,400 locations into brighter, airier concept stores.
The stores will carry fewer overall items but have a broader array of trendier products like the popular Beats By Dre headphones and digital fitness gadgets. They will have such features as hands-on tablet displays and a speaker wall to let customers compare speakers. And drawing on his background as an executive at drugstore chain Walgreen Co., Magnacca said the company moved impulse purchase items like earbuds, magazines and $9.99 Hex Bug toys from wall shelves to near the cash register.
Locations that are not remodeled will adopt some of the concept stores' remerchandising changes, like displaying phones by manufacturer rather than at tables in the front of the store organized by service carrier.
“I want to be the store that people go to and say, ‘I want to go to RadioShack and see what's new and exciting,' ” Magnacca said during a tour of RadioShack's new New York concept store. “Key for us is how do we make the stores shoppable and not overwhelm the customer.”
Magnacca replaced CEO James Gooch in February after only a year and a half on the job. One key change he is implementing is cutting down on past-peak electronics like home phones, GPS devices and even VHS tape rewinders.
“We used to be known as a company that holds onto products until the very end of their life cycle,” Magnacca said. Now, those products will be reduced in stores and offered online or not at all.
RadioShack has tried to reinvent itself before. In 2009, RadioShack rebranded as the more informal “The Shack,” but that marketing effort did not bear much fruit. In 2011, the company shifted gears to focus on hot smartphones and wireless plans over other gadgets, but those lower margin products ended up hurting profit more than helping sales.