Financier discusses RadioShack’s survival
A day after RadioShack’s narrow escape from liquidation in bankruptcy court, Soohyung Kim, the financier who led the contentious rescue, retreated to a back office to make a conference call with the chain’s almost 2,700 workers, vendors and landlords.
For many of those listening, it was their first direct real introduction to the chief architect of the retailer’s unlikely reincarnation.
“It’s time for a new day,” Kim said, his voice tense yet steady. “We’re here today because we know this can work.”
Minutes later, relieved and exhausted, Kim sat down with his small team at Standard General, his New York hedge fund, and pondered their feat.
“The fact that we actually pulled this off is. …” he trailed off.
“Gratifying?” Robert Lavan, a team member, suggested.
RadioShack is embarking on its second lease on life as a shadow of its former self, an afterthought in a world dominated by Amazon and Best Buy that has little need for scrappy stores that peddle cables and connectors.
But Standard General, whose lender takeover of about 1,700 of RadioShack’s 4,000 stores won court approval last Tuesday, does not see it that way.
RadioShack will slim down to become an electronics convenience store of sorts, focusing on things like Bluetooth headsets, chargers and other accessories that shoppers may need immediately rather than waiting a day or two for a delivery from an e-commerce website. One of the most profitable RadioShack stores is a Bridgehampton, New York, outlet that is frequented by weekend vacationers who have forgotten their smartphone chargers or earphones and duck in for a replacement. And one of RadioShack’s top-selling products is hearing aid batteries.
Tablets, laptops and digital cameras will disappear from RadioShack stores, and mobile phone sales and services will be handled by its new partner, Sprint, all of which affects just 7 percent of RadioShack’s sales.
In an interview, Ron Garriques, a former Dell and Motorola executive tapped last week to lead the new RadioShack, said the chain would also focus on small cities with populations of 5,000 to 100,000, where demand still exists for a neighborhood electronics store.
Kim said his fund’s work with highly indebted companies meant that he sometimes encountered bankruptcies. But RadioShack’s difficult bankruptcy appeared to have taxed him and his team.
Still, he said, that is what he does.
“We do our best to make lemonade out of lemons.”