Fort Worth, Texas-At the first annual shareholders meeting under its new name, RadioShack Corp. recounted its stellar financial performance of the past fiscal year, discussed current disappointing results and the economic environment of the first quarter 2001, and outlined operational initiatives to compete in the current sales slowdown.
Sales for the fiscal year ended December 31, 2000, were approximately $4.8 billion, up from more than $4.1 billion the previous year. Net income was $368 million, as compared with the nearly $298 million in 1999. And although last year was the most profitable year in the company's history, the first part of fiscal 2001 hasn't been as kind.
Sales for the first quarter ended March 31 jumped 9 percent on top of 18 percent sales growth for the same period in 2000, but adjusted net income dropped only 4 percent to $65.1 million, from $67.9 million the prior year. In April, same store sales decreased 2 percent.
To combat this trend, the company has developed a program dubbed "Think Growth," a reorganization of businesses to more efficiently handle RadioShack's ever-growing units of operation and position for future growth.
The business plan was quietly launched at the beginning of the year and realigns the corporate structure around RadioShack's three core businesses-connecting people, connecting places and connecting things-into strategic business units (SBUs). Each SBU now reports to David Edmondson, president and COO, as do the brand management, sales channels and shared services departments. B2C and B2B operations are served by distinct groups, also reporting to Edmondson.
The company believes there's an immediate opportunity to supply parts, cables and accessories to the commercial sector, particularly by targeting maintenance repair operations in large buildings. To this end, the company put in place outbound telemarketers at the end of last year. Those initial 20 employees are already producing approximately $600,000 worth of business per individual, according to Edmondson. One hundred additional positions are being added this year.
In addition, RadioShack has implemented a company-wide program to reduce operational costs in the face of slowing sales called "Think Profits." Three teams, each headed by a senior executive, as well as each SBU, have been actively examining vendor relationships, reviewing ways to reduce costs, more effectively implementing merchandising programs and reworking product categories when necessary. -DSN Retailing Today