RadioShack Develops Think Growth Plan
Fort Worth, Texas-At the first annual shareholdersmeeting under its new name, RadioShack Corp. recounted its stellarfinancial performance of the past fiscal year, discussed currentdisappointing results and the economic environment of the firstquarter 2001, and outlined operational initiatives to compete inthe current sales slowdown.
Sales for the fiscal year ended December 31, 2000, wereapproximately $4.8 billion, up from more than $4.1 billion theprevious year. Net income was $368 million, as compared with thenearly $298 million in 1999. And although last year was the mostprofitable year in the company's history, the first part offiscal 2001 hasn't been as kind.
Sales for the first quarter ended March 31 jumped 9 percent ontop of 18 percent sales growth for the same period in 2000, butadjusted net income dropped only 4 percent to $65.1 million, from$67.9 million the prior year. In April, same store sales decreased2 percent.
To combat this trend, the company has developed a program dubbed"Think Growth," a reorganization of businesses to moreefficiently handle RadioShack's ever-growing units of operationand position for future growth.
The business plan was quietly launched at the beginning of theyear and realigns the corporate structure around RadioShack'sthree core businesses-connecting people, connecting places andconnecting things-into strategic business units (SBUs). Each SBUnow reports to David Edmondson, president and COO, as do the brandmanagement, sales channels and shared services departments. B2C andB2B operations are served by distinct groups, also reporting toEdmondson.
The company believes there's an immediate opportunity tosupply parts, cables and accessories to the commercial sector,particularly by targeting maintenance repair operations in largebuildings. To this end, the company put in place outboundtelemarketers at the end of last year. Those initial 20 employeesare already producing approximately $600,000 worth of business perindividual, according to Edmondson. One hundred additionalpositions are being added this year.
In addition, RadioShack has implemented a company-wide programto reduce operational costs in the face of slowing sales called"Think Profits." Three teams, each headed by a seniorexecutive, as well as each SBU, have been actively examining vendorrelationships, reviewing ways to reduce costs, more effectivelyimplementing merchandising programs and reworking productcategories when necessary. -DSN Retailing Today