iPhone Shortages Not Helping RadioShack as Consumer Sales Plummet

As a longtime key retail partner for Apple, RadioShack is once again offering the iPhone this holiday season, but finding the phone on the retailer's shelves may be difficult, reports Mitch Nolen for Seeking Alpha. According to Nolen, RadioShack stores nationwide are reporting massive shortages in iPhone units with most models not available in stores during the important holiday shopping season.

radioshack_logo
RadioShack currently advertises the iPhone on its website with no ability to purchase the phone online. Users instead are directed to find a RadioShack store to purchase a unit, but many stores do not stock the iPhone, offering only a "Ship To Store" option that takes several days to fulfill. This method of inventory is markedly different from competitors like Best Buy, which sell the iPhone online, in-store and via an in-store pickup option.

RadioShack franchise owner Gary Mahan claims his sales have plummeted 30 percent year-over-year due to declining stock, with a major lost opportunity this Black Friday.

Mahan believes that if he had received the iPhone 6 and 6 Plus, his one store on the Oregon coast could have made an extra $1,000 in profit over the Black Friday weekend, which would have been a happy holiday gift for him, he says. He couldn't speculate how that $1,000 in lost profit opportunity might extrapolate to other stores in RadioShack's chain of 5,387 corporate-owned and franchised locations.

The reasons for low inventories aren't clear, as Apple and other partners have managed to maintain some store supplies even amid high demand, but RadioShack's shortages may be due to the retailer's tenuous financial position. The company is close to being delisted from the New York Stock exchange and may be forced to file for Chapter 11 bankruptcy to protect it from its creditors.

RadioShack's cash on hand at the end of last quarter had fallen to just $30 million, down from $440 million a year earlier and leaving the company unable to afford shutdown costs involved in a planned closure of 1,000 stores.

To minimize risk as its cash dwindles, the retailer may be reducing standing inventory and changing to an on-demand model that supplies devices when customers order them in store. Apple also may be withholding inventory, opting to ship its popular iPhone models to retailers with higher-volume sales.

Top Rated Comments

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74 months ago
Isn't Radio Shack essentially a "Dead Man Walking" anyway.... times they have a'changed.... Can't blame Apple...
Score: 15 Votes (Like | Disagree)
Avatar
74 months ago
Radio Shack will be gone soon...

Check out this recent article by a former employee:

A eulogy for RadioShack, the panicked and half-dead retail empire (http://www.sbnation.com/2014/11/26/7281129/radioshack-eulogy-stories)

RadioShack is a rotten place to work, generally not a very good place to shop, and an untenable business to run. Everyone involved loses.

These are stories from my three and a half years as a RadioShack employee.

Score: 13 Votes (Like | Disagree)
Avatar
74 months ago

Mahan believes that if he had received the iPhone 6 and 6 Plus, his one store on the Oregon coast could have made an extra $1,000 in profit over the Black Friday weekend, which would have been a happy holiday gift for him, he says.


Is this a joke? Radio Shack's problem is not a paltry $1000 of lost profit (i realize this is just one franchise), it is that they no longer know what their stores are trying to be.

Are they mini Best Buys? Do they specialize in Cellular gadgetry? Do they specialize in Toys? Do they still even sell radios?

Consumer electronics is a crowded market these days. I miss the Radio Shack of old that was the best place in town to get specialized electronics for the hobbyist or the professional. I'm talking stuff that you make other stuff with. Transistors, LEDs, cables. This kind of stuff is hidden like embarrassing inventory that the folks who work there try to avoid selling.

Don't get me started.
Score: 11 Votes (Like | Disagree)
Avatar
74 months ago
iPhones would not help Radio Shack.
Score: 8 Votes (Like | Disagree)
Avatar
74 months ago
Radio Shack is going into its sunset. I'll bet 2015 is the year things really start to shut down, Blockbuster Video style.
Score: 6 Votes (Like | Disagree)
Avatar
74 months ago
RadioShack, allow me to introduce you to Circuit City and CompUSA.
Score: 4 Votes (Like | Disagree)

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