Radio Shack 2009 Annual Report Download - page 59

Download and view the complete annual report

Please find page 59 of the 2009 Radio Shack annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 97

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97

52
NOTE 1 - DESCRIPTION OF BUSINESS
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. We seek to differentiate
ourselves from our various competitors by providing 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.
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, offer primarily 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
for a reasonable period of time, allowing us to transition the kiosks to a new format. In August 2009, we
transitioned these kiosks to multiple wireless carrier RadioShack-branded locations. They are now managed
and reported as extensions of existing RadioShack company-operated stores located in the same shopping
malls.
We are currently conducting a test rollout of kiosk locations in approximately 100 Target stores. This test will
be completed in 2010. At the conclusion of the test, a determination will be made with Target regarding
whether these operations will be expanded or closed.
OTHER
In addition to the reportable segments discussed above, we have other sales channels and support
operations described as follows:
Dealer Outlets: At December 31, 2009, we had a network of 1,308 RadioShack dealer outlets, including 34
located outside of North America. Our North American outlets provide name brand and private brand
products and services, typically to smaller communities. These independent dealers are often engaged in
other retail operations and augment their businesses with our products and service offerings. Our dealer
sales derived outside of the United States are not material.