Radio Shack 2011 Annual Report Download - page 11

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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, 2011, 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 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 three platforms. Our
mobility platform includes postpaid and prepaid wireless
handsets, commissions and residual income, prepaid
wireless airtime, tablet devices, and e-readers. Our
signature platform includes home entertainment, wireless,
computer, and music accessories; general purpose and
special purpose power products; headphones; technical
products; and services. Our consumer electronics platform
includes laptop computers, personal computing products,
digital music players, residential telephones, GPS devices,
cameras, digital televisions, and other consumer electronics
products. The amount and percentage of our revenue
derived from each of our three product platforms during the
last three fiscal years is stated in our MD&A.
OTHER
In addition to the reportable segment discussed above, we
have the following additional sales channels and support
operations:
Target Mobile: In the fourth quarter of 2009, we
commenced a test rollout of retail locations in
approximately 100 Target stores (“Target Mobile”). These
retail locations, which are not RadioShack-branded, offer
wireless handsets with activation of third-party postpaid
wireless services. In the third quarter of 2010, we signed a
multi-year agreement to operate these locations in certain
Target stores throughout most of the United States. At
December 31, 2011, we operated 1,496 Target Mobile
centers.
Dealer Outlets: At December 31, 2011, we had a network
of 1,091 RadioShack dealer outlets, including 33 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 significant.
RadioShack de Mexico: As of December 31, 2011, there
were 227 company-operated stores under the RadioShack
brand, 9 dealers, and one distribution center in Mexico.
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.
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, 2011, we had
three U.S. distribution centers shipping products to our
U.S. retail locations and dealer outlets. One of these
distribution centers also serves as a fulfillment center
for our online customers and as a distribution center