RadioShack Corporation (RSH)’s Turnaround Plan: A Glimmer Of Hope

In-store experience
If you had to use one word to sum up the experience at most electronics retailers today, it would invariably be “bad.” This is the one area of the plan I was most interested in, and the most telling in my opinion. It was music to investors’ ears when management said the company was going to give employees incentives to sell across the whole store instead of just mobile. This could be a huge win from a customer satisfaction and margin perspective.The company changed these incentives in April, and investors should keep an eye on the next quarter’s results to see whether the non-mobile sales have started to pick up and margins are improving.

Foolish final thoughts
All in all, the turnaround plan looks promising. But investors, myself included, shouldn’t turn a blind eye to the challenges facing the company. It appears Magnacca has put together a capable team of experts to carry out his vision, but only time will tell whether the team over at RadioShack can rise to the occasion. One thing is for certain: RadioShack Corporation (NYSE:RSH) is currently priced to go out of business or shrink substantially, and if the company can achieve profitability with its current retail footprint, recent investors will be handsomely rewarded. I’ll close with a quote from the master himself to keep investors and myself honest with the challenges facing RadioShack Corporation (NYSE:RSH):

“When a manager with a reputation for brilliance takes a business with a reputation for poor fundamental economics, it’s the reputation of the business that remains intact.”
— Warren Buffett

The article RadioShack’s Turnaround Plan Has a Glimmer of Hope originally appeared on Fool.com and is written by Blake Bos.

Blake Bos and The Motley Fool own shares of RadioShack.

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