Radio Shack 2009 Annual Report Download - page 11

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4
PART I
ITEM 1. BUSINESS.
GENERAL
RadioShack Corporation was incorporated in Delaware in 1967. We primarily engage in the retail sale of
consumer electronics goods and services through our RadioShack store chain and non-RadioShack-
branded kiosk operations. Our strategy is to provide cost-effective solutions to meet the routine electronics
needs and distinct electronics wants of our customers. Throughout this report, the terms “our,” “we,” “us”
and “RadioShack” refer to RadioShack Corporation, including its subsidiaries.
Our day-to-day focus is concentrated in four major areas:
• Provide our customers a positive in-store experience
• Grow gross profit dollars by increasing the overall value of each ticket
• Control costs continuously throughout the organization
• Utilize the funds generated from operations appropriately and invest only in projects that have an
adequate return or are operationally necessary
Additional information regarding our business segments is presented below and in Management’s
Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) elsewhere in this
Annual Report on Form 10-K. For information regarding the net sales and operating revenues and
operating income for each of our business segments for fiscal years ended December 31, 2009, 2008
and 2007, please see Note 15 – “Segment Reporting” in the Notes to Consolidated Financial Statements.
U.S. RADIOSHACK COMPANY-OPERATED STORES
At December 31, 2009, we operated 4,476 U.S. company-operated stores under the RadioShack brand
located throughout the United States, as well as in Puerto Rico and the U.S. Virgin Islands. These stores
are located in major shopping malls and strip centers, as well as individual storefronts. Each location carries
a broad assortment of both name brand and private brand consumer electronics products.
Our product lines are categorized into a number of platforms. Our wireless platform includes postpaid and
prepaid wireless handsets and communication devices such as scanners and GPS products. Our accessory
platform includes home entertainment, wireless, music, computer, video game and GPS accessories; media
storage; power adapters; digital imaging products and headphones. Our modern home platform includes
home audio and video end-products, personal computing products, residential telephones, and Voice over
Internet Protocol products. Our personal electronics platform includes digital cameras, digital music players,
toys, satellite radios, video gaming hardware, camcorders, and general radios. Our power platform includes
general and special purpose batteries and battery chargers. Our technical platform includes wire and cable,
connectivity products, components and tools, and hobby products. We also provide consumers access to
third-party services such as wireless telephone activation, prepaid wireless airtime, extended service plans,
and AT&T’s ConnecTech service.
KIOSKS
At December 31, 2009, we operated 562 kiosks located throughout the United States. These kiosks are
primarily inside Sam’s Club and Target store locations. These locations, which are not RadioShack-
branded, primarily offer wireless handsets and their associated accessories. We also provide consumers
access to third-party wireless telephone services.
In February 2009, we signed a contract extension with Sam’s Club through March 31, 2011, with a transition
period ending June 30, 2011, to continue operating kiosks in certain Sam’s Club locations. As part of the
terms of the contract extension, we assigned the operation of 66 kiosk locations to Sam’s Club in 2009. We
will assign at least 22 locations to Sam’s Club in 2010, and Sam’s Club still has the right to assume the
operations of up to 23 additional kiosk locations.
In April 2009 we agreed with Sprint Nextel to cease our arrangement to jointly operate the Sprint-branded
kiosks in operation at that date. This agreement allowed us to operate these kiosks under the Sprint name