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Analyst optimistic about RadioShack's latest deal

NEW YORK (AP) -- RadioShack's new agreement with the National Association of College Stores is likely to be a more profitable strategy than the chain's recent deals with Target and Sam's Club, a Janney Capital analyst said Wednesday.

RadioShack announced Wednesday that it signed a five-year deal with NACSCORP, a unit of National Association of College Stores. The agreement will put a variety of the company's consumer electronics and accessories in college stores, such as those from Beats by Dr. Dre, Skullcandy and SOL Republic.

David Strasser of Janney Capital Markets said in a client note that RadioShack products will probably be tested in a few of the stores before being rolled out more widely.

While RadioShack's previous deals with Target and Sam's Club had RadioShack owning the inventory and providing the labor, Strasser said the agreement with NACSCORP "is more like the dealer franchise stores that RadioShack has been successful with for many years."

"This appears to be a sensible and logical growth vehicle, that will not only drive profits, but increase name recognition with a demographic they are not strong with at the moment," he wrote.

Strasser maintained a "Neutral" rating on RadioShack stock.

RadioShack has been trying to reverse years of slumping sales amid tough competition, as more consumers buy electronics from online merchants like Amazon, and discounters expand their own electronics offerings. RadioShack has also been dealing with weaker demand for its mobile phones and phone plans. Last month the chain reported that its first-quarter loss widened.

Shares of RadioShack Corp. rose 7 cents to $4.23 in afternoon trading. They have traded in a 52-week range of $1.90 to $5.15.