Radio Shack 2011 Annual Report Download - page 53

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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, 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.
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
that ships store fixtures to our U.S. and Mexico
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, kiosks, customer
channels, delivery locations, service centers, credit
providers, distribution facilities and our home office into
a fully integrated system. Each retail location 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.
DISCONTINUED OPERATIONS
In February 2009, we signed a contract extension with
Sam’s Club through March 31, 2011, with a transition
period that ended on June 30, 2011, to continue operating
kiosks in certain Sam’s Club locations. As of December 31,
2010, we operated 417 of these kiosks. All of these kiosks