RadioShack exits security, outsources work

The retailer plans to contract with a systems integrator for internal security projects
Monday, November 1, 2004

FORT WORTH, Texas- RadioShack is currently in negotiations to outsource security for its 5,100 company-owned stores, a decision that will result in the closing of its Tandy Security Systems and TanSeco Systems installation subsidiaries.

RadioShack has operated an in-house security division for more than 25 years, according to Charles Hodges, spokesperson for RadioShack. But in recent years, the company has exited certain markets, such as selling Pier One, a home furnishing store, and dropping its wire and cable manufacturing business.

“We’re experts in retailing,” said Hodges. “We’re going to let other people provide the security for our stores. It’s an important function, but it’s not one that we feel we need to be doing ourselves.”

Hodges said the shift will help the company shore up finances and eliminate a business from its books that is not considered core. It was unclear how much of a cost savings will be achieved as a result of RadioShack eliminating its security subsidiary.

But along with the financial benefits, another advantage to RadioShack is that an outside security firm may have access to different security technologies, said Hodges.

“The rational is why should we be running our own, in-house store security division when there are companies out there that specialize and have the latest technology,” he said.

An official from RadioShack’s loss prevention department was unable to comment on the change, since the company was still negotiating with several systems integrators and monitoring firms to take over certain security functions, such as the installation work and project management done by 67 employees. The company expected to select a security service provider sometime last month.

Hodges was unable to release details on which companies are being considered or how many, but said the installation and monitoring functions will be handled by separate businesses.

RadioShack is also hoping that the new security provider will consider hiring most of its employees, limiting layoffs. Hodges said less than 10 employees from Tandy Security and TanSeco Systems will remain onboard.

“We’ll have people who will manage the process,” he said. “We just won’t be executing it internally.”