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RadioShack Corp. Message Board

bfe2412 11 posts  |  Last Activity: Jul 23, 2014 3:02 PM Member since: Feb 9, 2009
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    Jim Gooch to run another company into bankruptcy

    by bfe2412 Jul 23, 2014 2:07 PM
    bfe2412 bfe2412 Jul 23, 2014 3:02 PM Flag

    From what I've read, the ousted CEO was very benevolent, down to earth and generous with employees. The hated cousin wants to cut costs. When you look at what happened AFTER the one was outed, then the motive becomes VERY clear and all too familiar.

  • Looks like fired RSH CEO has been employed at a 71-store grocery chain based in the Northeast called Market Basket. The ouster of the old CEO has set the company on its ears and employees are actually up in protest over his ouster by a family member. The employees have held rallies over the exit of their chief executive, Arthur T. Demoulas. "Artie T.," or "ATD," as he's called by employees, was ousted in June by a board that's controlled by his cousin, the similarly named Arthur S. Demoulas

    And who did Arthur S bring in to run the company?

    Jim Gooch, the fired CEO of RadioShack.

    Want to take odds how long the company will last?

  • There are many reasons behind RadioShack’s struggles in recent years. And on Tuesday, a former high-level executive told board members that they share the blame for hiring the wrong type of CEO several years ago.

    Bernie Appel, who joined RadioShack when it was a fledgling chain with three stores in Boston and retired as president in 1993, said board members made a mistake by hiring a finance specialist instead of a merchandiser like the current CEO, Joseph Magnacca, after Len Roberts retired and his successor, Dave Edmondson, was forced to resign.

    Appel was referring to Julian Day, who was hired as CEO in July 2006, and his successor, Jim Gooch. Day was a veteran chief financial officer who had filled top finance roles at Safeway and Sears Holdings. During his time at RadioShack, he focused on aggressively cutting costs, including trimming headquarters jobs, and pulled the company out of its decades-long role in Fort Worth community affairs.

    He rarely articulated a merchandising vision for the company, which some thought he was prepping for a potential private equity buyout. But that never happened, and after the economy fell apart with the financial crisis, RadioShack was left vulnerable. Gooch, who was CFO under Day, became CEO in 2011 but was fired 16 months later.

    Appel, 82, compared RadioShack’s position with another Fort Worth retailer that changed CEOs around the same time, Pier 1 Imports. That company’s board hired Alex Smith, a veteran merchant, to succeed longtime boss Marvin Girouard in 2007. With the housing market tumbling, the home decor company was losing money and the stock price fell below 25 cents a share by 2009. But Smith engineered an impressive turnaround, and Pier 1 shares now trade above $17 a share.
    SHLACHTER, BAKER & KASKOVICH
    June 4, 2014, Fort Worth Star-Telegram

  • bfe2412 bfe2412 Jun 28, 2014 8:24 AM Flag

    There are differences, BUT there ARE a huge # of similarities as well - in particular

    1. Upper management screw-ups (in RSH's case, TOTAL and ABSOLUTE incompetence re Day and Gooch)
    2 misreading customers
    3. doing away with your bread/butter, hurting your reputation for sales/service and knowledge
    4. screwing over your experienced employees
    5. massive EXPENSIVE buybacks of stock
    6. pandering to Wall Street and running of company like a stock, not as a retail business.

    So, as an "amateur" and former employee, if it looks like a duck, etc....it's a duck.
    Yeah, there's differences and granted RSH is still in business while CC isn't, BUT I'll say this - if Day or Gooch were still in charge of RSH, the company would be in bankruptcy right now

  • bfe2412 bfe2412 Jun 27, 2014 8:08 AM Flag

    Considering that Day had no true retail experience and is an Eddie Lambert student/disciple, his incompetence in the role of CEO, as well as that of Jim Gooch (also a Lambert student/disciple) is what put the nail in the coffin. If you read what I posted of RSH v. CC's demise, you see the almost identical paths of destruction.

    BTW, Gooch crawled back home to Sears
    "HOFFMAN ESTATES, Ill., March 28, 2013 /PRNewswire/ -- Sears Hometown and Outlet Stores, Inc. (NASDAQ: SHOS) today announced the election of James F. Gooch to its Board of Directors and as Chair of the Audit Committee of the Board of Directors"

    Bryan Bevin, the VP/Store Ops that was Day's hatch man in his 6 year reign of incompetence is the CEO of Z Wireless in the Minneapolis-St. Paul Area Guess he finally got a wireless company since he destroyed RSH trying to make it into one.

    And Day? He walked off with millions after destroying RSH. He chose Gooch to succeed him and between the 2, they left the company in the toilet.

    If Magnacca can pull RSH out of the fire and resurrect it, my hat is off to him. At least he's trying. From listening to some of the long term employees that ARE still around, they're liking what they're seeing, but even they are doubtful. Day and Gooch's fiasco ran off the customers and once that happens, it's hard to get them back.

  • bfe2412 bfe2412 Jun 26, 2014 6:20 PM Flag

    Thanks. ;-)

    The recent drop to penny stock status saddens me, as I'm sure it does any former employee on this board. Charles Tandy is rolling in his grave and banging his head on his coffin, watching was done to his company.

  • bfe2412 bfe2412 Jun 26, 2014 6:18 PM Flag

    Actually, Sharpe, who Wurtzel talks about and who started CarMax, just died this week from complications of Alzheimer's He was in his 60s.

  • bfe2412 bfe2412 Jun 26, 2014 2:19 PM Flag

    Does ANY of this sound eerily familiar with what's gone on with RSH over the last 10+ years?

  • bfe2412 bfe2412 Jun 26, 2014 2:04 PM Flag

    "I think Circuit City declined in three stages," said Wurtzel, son of Circuit City's founder Sam Wurtzel.

    He cited a lack of focus from one of his successors, the inability to follow through on plans from another and a clash of cultures brought about by the last CEO.
    Those issues led the once-proud Henrico County-based retailer to miss the challenges posed by its biggest competitors — mass-market retailers and its chief rival Best Buy — and to put itself in an untenable position when the economy crashed in 2008.
    "They underestimated the change in consumer taste, the change in consumer buying patterns and they clearly underestimated the rapid rise of Best Buy," Wurtzel said.
    "They dismissed Best Buy as a flash in the pan, as a marginally profitable company that wouldn't survive," said Wurtzel, who was Circuit City's CEO from 1972 to 1986, its board chairman from 1986 to 1994, and its vice chairman from 1994 to 2001.
    Instead, Circuit City was too slow to react to a changing market, Wurtzel said . Wurtzel said the chain lost focus of its core operations as a consumer electronics retailer under then-CEO Richard L. Sharp, who tested new ventures such as automotive retailer CarMax and the digital video disc system called Divx. Those ventures, he said, distracted Sharp and other Circuit City executives.
    "New business excited him more, I think, than running the staid old company," Wurtzel said of Sharp.
    The new ventures came at a time when Best Buy and other retailers started passing Circuit City in sales and profit performance. But Circuit City executives and board members held onto the old business model of having customers buy merchandise from an employee on commission rather than buying the items right off the shelf.
    "They came to those beliefs without empirical evidence. The empirical evidence was to the contrary: Everybody else was doing it and succeeding," Wurtzel said.

  • bfe2412 bfe2412 Jun 26, 2014 2:00 PM Flag

    According to Wurtzel, the company declined due to the rise of Best Buy and other similar retailers in the 1990’s and a lack of strategic planning in the years that followed. Thus, when the recession of 2008 hit, “the cupboard was bare -- Circuit City had no cash in the bank -- and nobody wanted to come rescue the company,” says Wurtzel.

    Since the company’s founding, the retail landscape for consumer electronics has undergone a massive transformation. “When we started people never owned a TV before – this was a major family purchase, similar to buying a car today,” says Wurtzel. In those days, sales people and a showroom floor were an essential piece of the business. Today, says Wurtzel, most people own several TV’s, purchasing is more routine, and most consumers buy online “without ever talking to anybody.”

  • bfe2412 bfe2412 Jun 26, 2014 1:56 PM Flag

    There are a LOT of similarities between the demise of CC and the destruction of RSH. Too many to be comfortable with. The founder's son came out with a book chronicling the demise of CC and what went wrong. He blatantly states that pandering to Wall Street was one of the reasons they died. They also did away with their bread and butter - appliances - turning away customers who would have come to them because of it and their excellent sale and service. They also fired experienced sales staff, and it went down hill from there.

    Good to Great to Gone: The 60 Year Rise and Fall of Circuit City, by Alan Wurtzel.

RSH
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