After surviving many years of rumors predicting the retailer’s imminent demise, RadioShack has made it through bankruptcy to plan for another day, in fact to plan the company’s next corporate phase.  The company now has a new owner, a new chief executive, will employ a distinctly new format for nearly ninety percent of its stores and may need to seek a new name.  Had the bankruptcy war gone in another direction, the nearly one hundred year old company could be experiencing its final liquidation sales right now.

Standard General, the New York hedge fund and new company owner, outbid primary RadioShack creditor Salus Capital Partners to take control of the company.  There was a strong possibility that had Salus won the bidding RadioShack would have simply been liquidated into oblivion, after selling off any parts of the carcass that could command a cent.  Now Standard General must decide on the value of an additional deal to obtain the naming rights from Salus, which owns the RadioShack name and intellectual properties, including patents.

Among the many criticisms RadioShack has received in recent years, a prominent one has been the seeming irrelevance of its name.  Many note that in this increasingly tech driven age, a company moniker referring to a radio seems more than a bit outdated.

The company commenced operations in 1921 as ‘Radio Shack’, a single-unit concept designed to promote the then emerging concept of amateur (ham) radio.  At the time, an actual radio shack was a term for a small structure which housed the radio equipment on a ship.

As an indication of internal discomfort with the longstanding company name, five years ago one of the retailer’s several former regimes decided to rebrand the company as ‘The Shack’, through an expensive, elaborate ad campaign.  While the concept caught on for a while, it was relatively quickly abandoned, though management praised its success as a short-term promotional campaign rather than a new era in company branding.

Indications now are that of the company’s remaining 1,743 stores, 1,440 locations will be co-branded with Sprint.  It is hoped that the Sprint brand will drive customers to stores.  Customer traffic and lack thereof, has been a challenge for the retailer for some time.  As recently as this past holiday season RadioShack seemed to be searching for a product-based theme with which to lure shoppers to its stores, to simply attract more walk-in traffic.

A well-produced commercial featuring a musical number with Weird Al Yankovich left many viewers wondering which products RadioShack was promoting for the gift giving season.  Electronic toys seemed to be a focus, which brought up the question as to whether RadioShack was abandoning traditional products for trendy, new-age fare.

At these co-branded locations it is expected that a full array of Sprint products and services will be displayed upfront with a scaled-down selection of more typical RadioShack fare promoted toward the rear of the store.  All surviving non-Sprint, RadioShack locations are expected to now offer a smaller variety, more compact range of product.  It is expected that larger and more costly products will be eliminated from the store mix.  These are likely to include TVs, laptops and digital cameras.

Hopefully, the Sprint brand and its strong national promotions will inspire more shoppers to visit locations.  However, since cell phones began to rapidly gain popularity with consumers on the way to becoming necessities more than a decade ago, RadioShack has viewed this as one of the company’s revenue bright spots.  The morphing of basic cell phones into smart phones has only served to elevate the importance of the industry and its revenues for retailers. That was when RadioShack offered both contract plans and no-contract phones from across the scope of major carriers.  Limiting the chain to focus on only one carrier might well limit the number of shoppers to those who only want to shop just the one brand.

Years ago when RadioShack and Best Buy were growing cellular departments, it was noted in a CSG Insight that it might be better for at least some consumers to first decide on a carrier and then shop their stores.   Visiting Best Buy stores, associates noted that some of their favorite models had been rapidly pulled from respective locations due to insufficient popularity.  The corporate stores and affiliates of carriers featured the entire tech gamut.  Additionally, purchasing from consumer electronics chains could nullify attractive, money-saving grandfathered-in clauses which corporate stores automatically maintained.  Some CE store personnel were not aware of this until customers received their new, higher-priced bills and returned to angrily complain.

A very important question regarding RadioShack’s future involves retention of its nearly century-old name.  While many have questioned its value in modern times, any name which has endured for nearly a century has an intrinsic branding value.  It immediately conjures an established brand and a sense of comfort.

It is hard to imagine the new brain trust at RadioShack coming up with a replacement which could soon equal the branding power of the name which has made headlines for almost one hundred years.  Should Standard General not acquire the company’s name and intellectual properties it is pretty much back to square one, rather than moving forward to a nearby one hundredth birthday celebration.