Radio Shack 2010 Annual Report Download - page 13

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3
PART I
ITEM 1. BUSINESS.
GENERAL
RadioShack Corporation was incorporated in Delaware in
1967. Throughout this report, the terms “our,” “we,” “us” and
“RadioShack” refer to RadioShack Corporation, including its
subsidiaries. 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:
• Innovative mobile technology products and services,
as well as products related to personal and home
technology and power supply needs at competitive
prices
• Convenient neighborhood locations
• Knowledgeable, objective and friendly service
• Unique private brand offers and exclusive branded
promotions
Our day-to-day focus is concentrated in four areas:
• Providing our customers with a positive in-store
experience
• Growing gross profit dollars
• Controlling costs throughout the organization
• Utilizing funds generated from operations to enhance
long-term shareholder value
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”) included elsewhere in this Annual Report on
Form 10-K.
U.S. RADIOSHACK COMPANY-OPERATED
STORES
At December 31, 2010, we operated 4,486 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 strip
centers and major shopping malls, 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 seven 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 prepaid wireless airtime and extended
service plans in our service platform.
KIOSKS
At December 31, 2010, we operated 1,267 kiosks located
throughout most of the United States. These kiosks are
located inside Target and Sam’s Club stores. These
locations, which are not RadioShack-branded, offer
primarily wireless handsets with activation of third-party
wireless 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 of December 31, 2010,
we operated 417 of these kiosks. This transition will begin
on April 1, 2011, and conclude on June 30, 2011, with the
assignment to Sam’s Club of all kiosks operated by the
Company in Sam’s Club stores. As part of the terms of the
contract, we assigned the operation of 22 and 66 kiosk
locations to Sam’s Club in 2010 and 2009, respectively.
In April 2009 we agreed with Sprint 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. Most of these locations are now
managed and reported as extensions of existing
RadioShack company-operated stores located in the same
shopping malls.
In the fourth quarter of 2009, we commenced a test rollout
of kiosk locations in approximately 100 Target stores. In the
third quarter of 2010, we signed a multi-year agreement to
operate kiosk locations in certain Target stores (“Target
Mobile”). We operated 850 Target Mobile locations at
December 31, 2010. We plan to operate Target Mobile
locations in approximately 1,450 Target stores by June 30,
2011.