Radio Shack 2010 Annual Report Download - page 14

4
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, 2010, we had a network
of 1,207 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.
RadioShack.com: Products and information are available
through our commercial website www.radioshack.com.
Online customers can purchase, return or exchange
various products available through this website.
Additionally, certain products ordered online may be picked
up, exchanged or returned at RadioShack stores.
International Operations: As of December 31, 2010, there
were 211 company-operated stores under the RadioShack
brand, nine dealers, and one distribution center in Mexico.
Prior to December 2008, these operations were overseen
by a joint venture in which we were a slightly less than 50%
minority owner with Grupo Gigante, S.A.B. de C.V. In
December 2008, we increased our ownership of this joint
venture to 100%.
Support Operations:
Our retail stores, along with our kiosks and dealer outlets,
are supported by an established infrastructure. Below are
the major components of this support structure.
Distribution Centers - At December 31, 2010, we had
four U.S. distribution centers shipping to our U.S. retail
locations and dealer outlets. One of these distribution
centers also serves as a fulfillment center for our online
customers. Additionally, we have a distribution center
that ships fixtures to our U.S. company-operated stores
and kiosks.
RadioShack Technology Services (“RSTS”) - Our
management information system architecture is
composed of a distributed, online network of
computers that links all stores, customer channels,
delivery locations, service centers, credit providers,
distribution facilities and our home office into a fully
integrated system. Each store has its own server to
support the point-of-sale (“POS”) system. The majority
of our U.S. company-operated stores and kiosks
communicate through a broadband network, which
provides efficient access to customer support data.
This design also allows store management to track
daily sales and inventory at the product or sales
associate level. RSTS provides the majority of our
programming and systems analysis needs.
RadioShack Global Sourcing (“RSGS”) - RSGS
serves our wide-ranging international import/export,
sourcing, evaluation, logistics and quality control
needs. RSGS’s activities support our name brand and
private brand businesses.
Consumer Electronics Manufacturing - We operate
two manufacturing facilities in the United States and
one in China. These three manufacturing facilities
employed approximately 1,800 people as of December
31, 2010. We manufacture a variety of products,
primarily sold through our retail outlets, including
telephones, antennas, wire and cable products, and a
variety of “hard-to-find” parts and accessories for
consumer electronics products.
SEASONALITY
As with most other specialty retailers, our net sales and
operating revenues, operating income and operating cash
flows are greater during the fourth quarter, which includes
the majority of the holiday shopping season in the U.S.,
than during other periods of the year. There is a
corresponding pre-seasonal inventory build-up, which
requires working capital related to the anticipated increased
sales volume. This is described in “Cash Requirements” in
our MD&A. Also, refer to Note 17 – “Quarterly Data
(Unaudited)” in the Notes to Consolidated Financial
Statements for data showing seasonality trends. We expect
this seasonality to continue.
PATENTS AND TRADEMARKS
We own or are licensed to use many trademarks and
service marks related to our RadioShack stores in the
United States and in foreign countries. We believe the
RadioShack name and marks are well recognized by
consumers, and that the name and marks are associated
with high-quality products and services. We also believe the
loss of the RadioShack name and RadioShack marks
would materially adversely affect our business. Our private
brand manufactured products are sold primarily under the
RadioShack, AUVIO, Accurian, Enercell or Gigaware
trademarks. We also own various patents and patent
applications relating to consumer electronics products.
We do not own any material patents or trademarks
associated with our kiosk operations.
SUPPLIERS AND NAME BRAND RELATIONSHIPS
Our business strategy depends, in part, upon our ability to
offer name brand and private brand products, as well as to
provide our customers access to third-party services. We
utilize a large number of suppliers located in various parts