RadioShack

Tandy Corporation is established and begins trading on the New York Stock Exchange. McDuff's and Incredible Universe chains are shuttered; RadioShack forms alliance with Sprint. Computer City chain is sold to CompUSA; RadioShack forms alliance with Compaq. RadioShack Corporation--known as Tandy Corporation from its founding in 1960 until mid-2000--is one of the largest consumer electronics retailers in the United States. Forming the company's core operation are the 7,100 RadioShack stores located throughout the country. The stores feature two main categories of goods and services--electronics parts and accessories, and telephones and telecommunications accessories&mdash well as audio and video equipment, satellite systems, personal computers, and other electronics products. RadioShack has partnerships with a number of major consumer electronics and computer companies, including Sprint Communications Company in the area of telecommunications; Compaq Computer Corporation, whose Compaq brand is the exclusive computer brand sold at RadioShack; Thomson Multimedia, for a line of RCA-branded digital audio/video products and services; and Microsoft Corporation in the area of Internet access as well as the radioshack.com e-commerce site. RadioShack Corporation also operates eight manufacturing plants in the United States and China that produce electronics products, most of which are sold in company stores; and a network of service centers that repair consumer electronics products and personal computers. Founder Charles Tandy's talent for marketing became evident when he took over the leather store his family had operated since 1919. He began to expand into the hobby market. Subsidiary locations had to be found as mail-order and direct sales increased. In 1960, as scouts and campers all over the country made moccasins and coin purses from Tandy leathercraft and hobby kits, the Tandy Corporation was established and began trading on the New York Stock Exchange. As good as business was, it could not satisfy Tandy's passion for retailing. By the early 1960s, he began looking for a way to diversify. In 1963, Tandy purchased RadioShack, a virtually bankrupt chain of electronics stores in Boston that had been founded in 1921. Within two years, Tandy was making a profit on a company that had nearly $800,000 in uncollectibles when he took over. Ten years after starting with nine Boston outlets, the Tandy Corporation was opening two RadioShack stores every working day. By all accounts, Charles Tandy was a modest man from Fort Worth, who stayed in his original office and answered his own phone until the day he died. While his CB radio moniker was 'Mr. Lucky,' Tandy's success was, according to analysts, due to more than just luck. They gave much more credit to three key marketing strategies that Charles Tandy developed and implemented. First, Tandy stressed the importance of gross profit margins. Popular wisdom said a chain store's profits lay in cutting prices to yield a high sales volume. Tandy thought differently. As far as he was concerned, cutting the profit margin cut the profit. So he maintained market prices but reduced RadioShack's 20,000 item inventory to the 2,500 best-selling items. Second, Tandy kept RadioShack prices competitive. He eliminated a whole spectrum of middleman costs by limiting stock to private label items. At first, the company established exclusive contracts with manufacturers, but as RadioShack grew, more and more items were designed and manufactured by associates or subdivisions of the Tandy Corporation. In the late 1980s, Tandy still manufactured about half of the products sold in its RadioShack stores. Twenty-five North American and six overseas manufacturing plants produced everything from simple wire to sophisticated microchips, and RadioShack's Realistic brand name--which dated back to the 1950s--had achieved nationwide recognition. Charles Tandy's strategy of pairing high profit margin with high turnove