Radio Shack 2012 Annual Report Download - page 2

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Dear Fellow Shareholders:
RadioShack is an icon in the American retail
landscape with a 90-year heritage, an extensive
network of stores and one of the most highly
recognized brands in the nation. Yet, for the past
several years, the company has fallen far below its
potential. In a struggle to compete with big-box
stores and e-tailers, RadioShack has employed
several strategies intended to grow sales and
maintain gross margins. Unfortunately, some of
these have failed to leverage our core strengths,
hampering the company’s progress and leading
to a disappointing financial performance in 2012.
As I take the helm, I am committed to putting
RadioShack
back on the path of delivering
shareholder value.
My first priorities are to address
our immediate business
challenges and to develop
a long-term strategic vision for the company, backed
by a clear action plan that we will execute in the
months ahead. While the details of this plan are
still in development, it will center on rebuilding
RadioShack’s customer-driven culture and
capitalizing on our proud legacy as a technology
innovator to enhance our product and service
oerings, reinvigorate our stores, strengthen our
digital presence and deliver a compelling and
seamless brand experience to every customer at
every point of interaction.
RadioShack’s management team set the stage
for these initiatives during 2012, taking decisive
measures to begin stabilizing the business,
including moderating the gross margin rate erosion
in mobility and consumer electronics, and driving
sales growth in our signature category. This team
Joseph Magnacca
Chief Executive Officer
On February 11, 2013, RadioShack appointed Joseph C. Magnacca as Chief Executive
Officer and a member of the Board of Directors. Mr. Magnacca has more than
25 years of experience in the small-box retail sector and was instrumental in the
successful turnarounds of two major retailers, Shoppers Drug Mart in Canada and
Duane Reade in the U.S.
also positioned RadioShack’s financial and
operational structure to weather the challenges
a turnaround may bring. This included issuing
$175 million in new financing, trimming our cost
structure and terminating unprofitable businesses.
As a result, we entered 2013 with a strong balance
sheet, including more than $925 million in liquidity.
I’m energized by the opportunity to revitalize
RadioShack,
but I recognize the months ahead
may not be easy. Turnarounds can be dicult, and
the current economic climate presents additional
challenges. However, RadioShack is a strong
company with the foundation necessary to succeed.
We have a powerful brand that has remained
relevant to consumers for nine decades, despite
the rapid, dramatic and continuous evolution of the
technology sector. We have strong relationships
with leading vendors and a portfolio of trusted
private brands. We have a vast network of nearly
4,400 company-operated stores and nearly
1,000 dealer outlets across the U.S. We have an
established international presence in more than 25
countries, including 269 company-operated stores
in Mexico, that leverages our strong global brand
equity and represents a platform for future growth.
Most importantly, we have valuable human capital
in the form of highly trained sales associates who
know our products and are genuinely focused on
delivering solutions.
As we draw on these strengths to carve out a new
niche for RadioShack in our marketplace, we ask
our valued constituents—including shareholders,
customers, employees and vendors—to continue to
stand by us. In the coming months, we look forward
to sharing progress updates with you, and over the
long term, we expect to reward your loyalty with
the strong and sustainable value you deserve.