For RadioShack, the end is near

Gentlemen and gentlewomen of a certain age harbor fond memories of trips to RadioShack. In days of yore, ham radios and homemade guitar amplifiers would emerge from the mysterious jumble of wires and audio components hawked by this unpretentious electronic retailer.

Among younger generations with a much different view, the business enjoys a nickname: “S–t Shack.” Definition as per the Urban Dictionary: “derisive term describing the quality of products, the prices, and the people that go there.”

Whatever one’s view of this American institution with about 27,000 employees, it is near death. On Thursday, RadioShack warned that it may file for Chapter 11 bankruptcy.

“We may not have enough cash and working capital to fund our operations beyond the very near term, which raises substantial doubt about our ability to continue as a going concern,” the company said in a report filed with the Securities and Exchange Commission.

Translation of “substantial doubt about our ability to continue”: Don’t be caught with the ticker symbol “RSH” in your 401(k). This language is the closest a company comes to shouting “We surrender!”

The analysts piled on. After all, as Fortune pointed out, if the stock trades below $1 for 30 days, it will be delisted from the New York Stock Exchange.

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“We believe the company will default or restructure in some form that is tantamount to a default within the next six months,” said Standard and Poor’s.

“It would surprise me if we got to Nov. 1 without a bankruptcy,” Michael Pachter, an analyst at Wedbush Securities Inc., told Reuters.

“I don’t think that the chances are great that RadioShack survives,” said David Tawil, president of hedge fund Maglan Capital.

Anybody want to buy a few shares — about $1 each in after-hours trading — and see how this turns out?

RadioShack’s fall from grace was as slow and brutal as its rise during the American Century was inevitable. Founded in 1921 in Fort Worth to sell radio parts, it went public in 1935 and, in the years after the Second World War, was the center of a home-electronics revolution. When record players were phonographs and stereos were hi-fis , this is where people bought them.

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Then: computers.

“Back before ‘Star Wars’ came out,” Dana Blankenhorn of the Street wrote earlier this year, “when Fleetwood Mac was a supergroup, when I had some hair on top of my head and when hobbyists built their own computers from parts, RadioShack was an important place.”

Owned by what was then Tandy Corporation, RadioShack was one of many players in the home-computing revolution. It even made one of the first laptops. The problem: It wasn’t Microsoft or Apple. As much as it tried to throw its elbows around in an emerging market, the brand never quite outgrew its unbecoming name.

It was, after all, a “radio shack.”

Of course, there were always new gadgets for RadioShack to sell. One chief executive, an analyst wrote in 1992, “oversaw the change of Radio Shack from a plugs and jacks store with consumer electronics to a consumer electronics store with plugs and jacks.”

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This worked for a long time. In fact, the stock reached an all-time high of $79.50 in December 1999. But it remained the place people went to buy accessories for more expensive products manufactured elsewhere. Cellphone chargers? IPod covers? RadioShack had them. It just didn’t have Steve Jobs or Bill Gates.

The store’s customer service was also notoriously bad, with clueless customers asking clueless employees what dongle they needed to make their mp3 player work with their stereo. And for many years, the company would insist on asking for customers’ zip codes. Salon made light of this in a satirical piece: “The company that demands your ZIP code for the mere purchase of a battery won’t disclose its own to potential buyer.”

“If we give out our ZIP code to every Tom, Dick and Harry, pretty soon people will start coming in all the time,” the company’s chief operating officer most definitely did not tell Salon in 2010. “That’s going to cut into our employees’ ability to goof around with our remote-controlled drag racers, a benefit we offer because it’s cheaper than health insurance.”

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As The Washington Post’s Sarah Halzack reported, the company tried to rebrand as “The Shack” in 2009. It also implemented a “Fix It Here” initiative and store redesign.

“By the end of 2013, the company will have made improvements to nearly all 4,300 U.S. company-owned stores,” the company’s Web site reads. “This includes more than 100 concept and brand statement stores, which feature bright, completely redesigned interiors and new exterior signage.”

The look was fresh, but it didn’t matter. Not enough people under 30, it seemed, wanted to browse a cut-rate version of the Apple store looking for quarter-inch to eighth-inch adapters. Earlier this year, the company planned to shutter 1,100 locations.

One anecdotal observation: The RadioShack located on the same block as The Washington Post is often empty.

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