So, what would Amazon do with RadioShack stores?

February 3, 2015 12:29 PM

Showrooms for brands such as Kindle and Fire, and a place for customers to pick up online orders and return products—were Inc. to buy RadioShack stores, that’s how Amazon could employ those locations, says one longtime Amazon observer.

That speculation comes amid a Bloomberg News report that the largest online merchant in the Internet Retailer Top 500 Guide has discussed buying some RadioShack Corp. locations after the electronics chain files for bankruptcy. Neither Amazon nor RadioShack immediately responded to requests for comment.

Scot Wingo, CEO of ChannelAdvisor Corp., which helps retailers sell on web marketplaces operated by Amazon and competitors, envisions those three main uses should Amazon and the longstanding electronics retail chain reach a deal.

The possible move, discussed as part of RadioShack’s looming trip to bankruptcy court, would represent Amazon’s biggest push into traditional bricks-and-mortar retail. Amazon joins other potential bidders, including Sprint Corp. and the investment group behind Brookstone, in evaluating RadioShack stores, sources familiar with the situation say. RadioShack has more than 4,000 U.S. locations and is moving toward a deal to sell a portion and close the rest, according to sources. Sprint has discussed buying 1,300 to 2,000, they said.

Amazon buying part of RadioShack wouldn’t come as a surprise to many in e-commerce. An Internet Retailer survey late last year found that 21.9% of respondents expected Amazon to buy a distressed bricks-and-mortar store.

Retail locations would put Amazon on a more even footing with Apple Inc., which has hundreds of stores in choice shopping districts. “Imagine an Apple or Microsoft store type of presentation for these Amazon products,” Wingo says.

Still, while Amazon’s Kindle has been a breakthrough success, some of its other devices haven’t connected with consumers. Its Fire smartphone didn’t sell well and contributed to a $170 million inventory write-down in 2014’s third quarter.

Amazon continues to invest in new hardware as it pushes beyond its core business of selling merchandise online. In November, it introduced the voice-activated Amazon Echo speaker that lets consumers stream music and add items to Amazon shopping lists. The company also has opened “pop-up” shops to entice shoppers during the holidays.

Wingo also imagines uses for those stores that veer into what he calls “sci-fi” uses:

• Drone takeoff and landing centers

• Consumers could have their measurements made with a scanner to ensure better fit for future apparel items.

• Amazon will have enough capacity in its shipping/distribution center infrastructure to potentially compete with FedEx Corp. and UPS Inc. 

• Amazon could start deliveries from these stores and get product even closer to top Prime buyers. Prime has an estimated 40 million members in the United States. That represents about 45% of U.S Amazon customers. 

RadioShack traces its roots to 1921, when it began as a mail-order retailer for amateur ham-radio operators and maritime communications officers. It expanded into a wider range of electronics over the decades, and by the 1980s was seen as a destination for personal computers, gadgets and components that were hard to find elsewhere. In more recent years, competition from Wal-Mart Stores Inc. and an army of e-commerce sellers, including Amazon, has hurt sales.

Bloomberg contributed to this report. 




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