RadioShack Expands DIY Portfolio
Struggling consumer electronics speciality retailer, RadioShack Corp. (RSH) extended its partnership with Maker Media, which will expand its Do it Yourself (:DIY) product base. Notably, Maker Media is an existing DIY partner of RadioShack.
The collaboration between the two will add to Maker Media’s existing line of DIY products within RSH’s fold, which include popular kits like ‘Getting Started with Arduino’. The new DIY products like kits, robotics and tools will be available in RadioShack stores and online during the latter part of the year.
Maker Media serves a growing community of creative makers by providing its products, services and by connecting them with its partner. The company is the creator of MAKE Magazine, Makezine.com and Maker Faire, which will also be available in RadioShack stores in the coming months.
RadioShack started ‘The Great Create’ project to get the best out of its most creative customers and display the creations online or through its stores. In that effort, the company added several partners like Popular Science, WIRED, Popular Mechanics and has also added hundreds of new parts and tools in its stores. Some of its most popular DIY kits are ColdHeat Soldering Tool, Light-Emitting Diodes (:LED), and Electroluminescent wire among others.
An adverse product-mix toward low-margin devices and a secular downtrend on its legacy consumer electronics business has taken its toll on RadioShack’s results. Recently, RadioShack posted highly disappointing first-quarter 2013 financial results, where the top line and the bottom line failed to beat the Zacks Consensus Estimate. This sombre condition is mainly attributed to weakness in the company’s postpaid wireless business.
We believe that the partnership extension is an attempt by the company to diversify its product offering to compensate its loss in the wireless and electronics business. Moreover, this innovative product offering will also increase the company’s falling footfall as customers now prefer purchasing online rather than visiting retail stores.
Other Stocks to Consider
RadioShack currently has a Zacks Rank #3 (Hold). Other stocks to consider in the retail industry include hhgregg Inc. (HGG), Conns Inc. (CONN) and Costco Wholesale Corp. (COST). While Conns currently has a Zacks Rank #1 (Strong Buy), both Costco and hhgregg carry a Zacks Rank #2 (Buy).
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