Radio Shack 2010 Annual Report Download - page 57

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NOTE 1 – DESCRIPTION OF BUSINESS
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.
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.
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%.