Radio Shack Becomes Tandy’s Brightest Star Shift Away From High-Tech Products Pays Dividends For Retailer

In an increasingly high-tech world, practitioners and purveyors of old technology sometimes look ridiculous.

We make fun of rotary-dial telephones. We laugh at CB radios. Sometimes we scoff at Radio Shack, whose very name is a throwback to the past. In fact, it’s a pretty good place to buy a CB radio.

While Radio Shack isn’t the most futuristic place on the planet, Tandy Corp. is learning there are some advantages to stepping back from the cutting edge. Earlier this month, Tandy announced it will bury Incredible Universe, a failed experiment at building humongous electronics stores. Tandy also is paring back its faltering Computer City chain. Late last year, Tandy announced plans to close all 53 of its McDuff stores.

The lone star at Fort Worth, Texas-based Tandy is Radio Shack, the chain that began in 1921 as a mail-order company catering to ham radio operators. While it closes the other stores, Tandy plans to add up to 1,000 new Radio Shack franchises during the next five years. That comes on top of a 500-store expansion, which is now more than halfway completed, announced in March 1995.

“The future does begin with Radio Shack,” said Tandy Chairman John V. Roach.

According to Steve Smith, editor of a technology newsletter called TWICE, “Radio Shack has been Tandy’s bellwether. Its fundamentals of generating profits are better than almost anyone else in this business.”

Much of the credit for that vitality is attributed to Len Roberts, the former fast-food executive who worked as the president at Arby’s and then at Shoney’s before becoming president of the Radio Shack division in 1993. In addition to running Radio Shack, Roberts is president of Tandy Corp.

“Len Roberts has made people think of Radio Shack as being a chain with growth potential,” said Lynn Detrick, stock analyst with Williams MacKay Jordan & Co. in Houston. “He’s been quite good at identifying the strengths of the chain and building on that.”

Under Roberts, Radio Shack has shifted away from high-tech products and has thereby avoided some of the price wars that have caused computer stores such as Incredible Universe, Best Buy and Circuit City to struggle.

“We wanted to differentiate ourselves, so we got out of the retail business 3-1/2 years ago,” Roberts said. “We are in the service business now.”

To promote that identity, Radio Shack has adopted the slogan, “You’ve got questions, we’ve got answers.”

“Our mission at Radio Shack is not to sell technology. Our mission is to demystify technology for the mass market,” Roberts said. “People come to us because they really need help. They need hand-holding. Where there is confusion in the marketplace, we do very well.”

Roberts’ “mission” fits in neatly with Radio Shack’s traditional niche, which is selling all kinds of electronic gizmos and showing customers how the darn things work.

“We carry stuff you can’t find most places,” said Carolyn Wilmouth, who owns a Radio Shack franchise in Cleveland, Texas. “That’s our secret, really.”

As for Radio Shack being a little retro in a high-tech world, Roberts doesn’t see things that way.

“The popular perception of us as an old-shoe concept is changing,” he said. “We are going to be very ‘in.’ Service is in, not out. Computer retailers are selling boxes on shelves with no help, no service. They differentiate themselves with price. Now they are in big trouble.

“That is out,” he said emphatically. “We are an ‘in’ concept - definitely.”