RadioShack to exit retail security

Friday, March 1, 2002

FORT WORTH, Texas-Consumer electronics retailer RadioShack announced in late December that it would no longer carry security systems because of diminishing returns from that division.

The company, which has more than 7,300 stores and dealers across the country, has carried security products, such as wireless alarm panels, security cameras, as well as cables, monitors, time-lapse VCRs and other security related products, for at least the past 20 years, according to Kay Jackson, the company's director of media relations.

The decision comes amid a product realignment for the company where it decided to exit areas that weren't core to the company's consumer electronic business and did not generate adequate returns, Jackson said. That realignment, which resulted in the company exiting not only security, but car stereo, pagers and commercial electronic parts, will also include the closing of 35 unprofitable stores as well as end the company's national commercial installation business. The company did not offer any monitoring services.

"When you look at car audio and security, the products targeted for those were really for the do-it-yourselferand more people were wanting the installation done for them," Jackson said. "When we looked at how to maximize the business categories, this was just one of those we made a decision to exit."

RadioShack will still maintain a national residential installation division, but that division will focus on satellite television, home theater and other home electronic installations, she said.

Jackson said the company was not prepared to discuss how its stores would dispose of its inventory, but said RadioShack would discontinue carrying security systems and car stereos sometime this year.

RadioShack Canada last summer struck a strategic partnership with a Canadian installation company to market AlarmForce's two-way voice system, called AlarmVoice, and have AlarmForce handle the installation and monitoring. RadioShack Canada, a subsidiary of New York-based InterTAN Inc., is a separate company that licenses the name from RadioShack Corp.

"We're doing very well with that promotion," said Joel Matlin, AlarmForce's president and chief executive office.

Customers who look for a security system at any of RadioShack Canada's 900 retail stores are referred to AlarmForce, while AlarmForce promotes RadioShack Canada's line of batteries to customers. Both companies also cross-market each other's products in marketing literature.