Radio Shack 2012 Annual Report Download - page 49

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47
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, 2012, we operated 4,395 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.
TARGET MOBILE CENTERS
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, 2012, we
operated 1,522 Target Mobile centers.
In October 2012, we exercised our contractual right to notify
Target of our intention to stop operating the Target Mobile
centers if we could not amend the current arrangement. An
acceptable arrangement was not negotiated; therefore, we
will exit this business by April 8, 2013. The Target Mobile
segment will be reported as discontinued operations after
the wind-down of this business, which we currently expect
to occur in the first quarter of 2013.
OTHER SALES CHANNELS
In addition to the reportable segments discussed above, we
have the following additional sales channels and support
operations:
Dealer Outlets: At December 31, 2012, we had a network
of 1,008 RadioShack dealer outlets, including 32 located
outside 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 the United
States are not significant.
RadioShack de Mexico: As of December 31, 2012, there
were 269 company-operated stores under the RadioShack
brand, 6 dealers, and one distribution center in Mexico.
RadioShack.com: Products and information are available
through our commercial website
http://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 Target Mobile centers and
dealer outlets, are supported by an established
infrastructure. Below are the major components of this
support structure.
Distribution Centers - At December 31, 2012, 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 Target Mobile centers.
RadioShack Technology Services (“RSTS”) - Our
management information system architecture is composed
of a distributed, online network of computers that links all
stores, Target Mobile centers, 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 Target Mobile centers 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.