As RadioShack slouched toward its second bankruptcy in two years, employees of the once-great retailer inundated Consumerist with tales of tight-lipped managers, confusion over store closings, and “clearance” savings that aren’t what they appear to be.
In general, the RadioShack workers we spoke to described a company in disarray, with fickle management that was unable or unwilling to communicate information about the retailer’s future to its own employees.
[Note: We’ve changed all names to protect workers’ identities]
Our Lips Are SealedImage courtesy of Steve R.
The most common refrain we heard from workers before the bankruptcy was filed? “No one is telling us anything.”
“There has been little to no communication from the higher ups and they shut down the employees’ internal message board,” Steve, who works at a corporate-owned store, tells Consumerist.
“Honestly, I’ve been getting more news from Consumerist than my employer.”
We also heard from Cyrus, who says his RadioShack has been deemed a “non-closing” store, even though it’s currently holding a clearance sale. Meanwhile, three other Shacks in his area have been given until the end of the month to close up for good.
“There has been absolutely no communication with my store, which has been deemed ‘non-closing,’ and we will be getting shipments from closing stores to blow out the merchandise,” he wrote to Consumerist.
Cyrus knows that his store might be safe for the moment, but that is no guarantee that it will be around a few months from now.
“The rumor from the managers has been that non-closing stores will close a few weeks later than others to get rid of merchandise,” he tells Consumerist.
It’s not like workers aren’t asking, either — Cyrus says he’s contacted other stores and spoken to members of senior management, but everyone claims they don’t know anything more. He says his regional director didn’t even mention the store closings or clearance sale.
And even when employees did get information from superiors, things continued to change.
“They had originally told us the 200 or so closing stores would be designated as ‘clearance centers’ to sell off old inventory at reduced prices, and swore up and down they weren’t closing,” Steve says. “Clearly, that was BS.”
Another common refrain we’ve heard? Workers are getting more information from the media than they are from the company.
“Honestly, I’ve been getting more news from Consumerist than my employer,” Steve tells Consumerist.
Clearance Sale Claims
RadioShack stores are now plastered in posters and signs declaring “Everything Must Go!” and “Entire Store On Sale!” They advertise discounts of as much as 70%, but some Shack staffers tell Consumerist these discounts aren’t always as deep as they appear because management raised prices last month in apparent preparation for these clearance sales.
About two weeks before the March 8 bankruptcy filing, a RadioShack regional office emailed area stores to advise them that prices on more than 500 items per store would be changing toward the end of February. The message shown to Consumerist did not include any indication of store closings.
“A couple of weeks ago we raised the prices of every item in the store by 20-50% and now our clearance sale is 20-50% off,” says Cyrus.
Kevin, who works at one of two stores closing in his town, says his store also raised the prices on all its products so that people would believe they’re getting “a huge discount, but in reality they are only getting half of the discounted prices.”
Among the examples noted by employees is a bluetooth headset. The store staffers say the device recently sold for $19.99 before having the price raised to $24.99. It’s now listed on the RadioShack website at that higher “regular” price with a “30% off” price of $17.49. If the regular price had remained, that discount would seem less impressive, at only 12.5%.
Kevin also says his manager told him the reason for having the sale wasn’t because the store was closing, but because, “It was supposed to bring back the old customers.” Kevin claims that his manager repeatedly told him and his coworkers that their location would not be closing.
But when he went into work, he says his manager had just gotten off the phone with the market manager, who explained the store would indeed be closing due to “company decisions.”
Kevin tells Consumerist that he’s irritated about not being told the truth: “RadioShack is filled with higher-ups that only care about making money.”
We’ve seen previous examples of bankrupt stores where the “discounted” prices on liquidation sale items are based on regular prices that are higher than what had been charged before the bankruptcy. However, this is the first instance that we’ve come across where the prices and discounts were being set by the retailer, as opposed to a third-party liquidation company.
In a recent bankruptcy court filing, RadioShack explained that — having just gone through this whole process when it closed stores in the 2015 bankruptcy — it would be “more cost-effective if they were to conduct the Store Closing Sales themselves, but retain a liquidation
consultant to advise them in that process as appropriate.”
Will I Have A Job Next Month?
Without any hard numbers on which locations will close, which will become Sprint stores, and which — if any — will remain open, employees at hundreds of RadioShacks are left wondering if and when they’ll be out of a job.
“They still swear up and down that our location is staying open.”
In documents [PDF] filed with a federal bankruptcy court, RadioShack explained that more than 150 stores had begun closing before the Chapter 11 filing. Another 365 will close by the end of March. Separately, Sprint confirmed earlier this week that it will take over “several hundred” stores for its own retail use.
At the same time, that filing also leaves open the possibility that all remaining corporate-owned Shacks will be shuttered permanently.
“I had no time to prepare my finances. This is sad and heartbreaking.”
“My store has received a ‘store closing,’ banner but we haven’t been given the go ahead to put it up,” Steve writes. “They still swear up and down that our location is staying open.”
Kaia, an assistant manager at a store, says staff was only given two-weeks’ notice, and she’s not sure what will happen next.
“I had no time to prepare my finances,” she writes. “This is sad and heartbreaking.”
Others seem slated for jobs with Sprint, including “Andrew and Andrew,” the employees mentioned on the sign our own Laura Northrup snapped at her local RadioShack in Delmar, NY, last week.
“We’ll be at it until the end of the month,” says Jeremy, who works at a store in North Carolina that is slated to close. “I just hope it’s a layoff and not a termination when all is said and done.”
Doomed To Fail?Image courtesy of Matthew Hunt
RadioShack staffers, like Jeremy, who were around for the 2015 previous bankruptcy filing say they aren’t surprised by this latest failure.
“They trained us to sell — and keep away from the parts drawers — and did not train us enough about electronics.”
Jeremy has been working at Shacks since 2012, even though he says the last bankruptcy cost him a promotion. He tells Consumerist that General Wireless — the company formed after 2015 to run the resurrected RadioShack — did try to keep things working, though the corporate decisions were “so damn scatterbrained.”
He describes weeks where “we’d change sales up two or three times a week,” a big change from the previous policy of sales that generally lasted at least a full week.
Cyrus started working at RadioShack right after the first bankruptcy, and says it’s hard to say that the company turned anything around.
“Everything seemed very dysfunctional from the higher ups,” he tells Consumerist. “We’d get one day’s notice for massive sales and rearrangements.”
“Overall, it’s been very poorly run in my estimation,” he adds.
Steve, who joined RadioShack in January 2016, says inventory was one of the biggest problems.
“For the entire time I have worked there we have been perpetually out of stock on something, be it remotes, home phones, cable modems, streaming devices, or power supplies,” he tells Consumerist. “I can’t count how many customers/sales we have lost due to not having products in stock.”
According to Kevin, when he joined RadioShack in early 2016, the “new” goal of the company was to have the employees increase profits by selling the company’s products, and not focus on the old concept they had of helping hobbyists.
“They did not care about those types of customers anymore because they only came in for parts that were under $5,” he tells Consumerist, adding that the company’s focus was more on sales rather then knowledge of electronics.
“They trained us to sell — and keep away from the parts drawers — and did not train us enough about electronics,” he writes.
It’s The Final Countdown
Now that bankruptcy papers have been filed, workers tell Consumerist they’re finally getting some information from RadioShack.
Kaia says that although they’d previously been told they’d have to be out by Friday, March 10, that was later moved to March 14.
“We try at my location to be keep up morale, but uncertainty of our future is in the air,” she told Consumerist last week.
Yesterday, when she went to the store for what she thought would be her last day, she was hit with another surprise.
“I went to work today to find the store cleared out and a closed sign,” says Kaia. “I had to call my regional manager to get the news.”
“I really don’t think they have any kind of solid plan in place.”
Steve says he went to another location — one of the 200 originally slated to close — on Thursday to help that store’s staff with packing up the remaining inventory and loading it into a truck to go back to the store where Steve works.
Steve describes a disorganized process, with no formal counting or documenting of what they brought in. He says this is different from the company’s usual procedures, so it’s unclear how the inventory is being accounted for.
“I really don’t think they have any kind of solid plan in place,” he says of how the company is shutting down stores. To that end, he notes that another location nearby went from closing on Friday to closing in four days, and then again to the end of the month.
All this confusion which makes it tough to communicate with customers about which stores are closing, he adds.
“It’s pretty hard to tell customers the corporate line of ‘This one is here to stay,’ with all the mounting evidence,” he writes. “Honestly I tell people the truth, we have no idea what the plan is, if one even really is in place.”
Jeremy says the mood has felt a bit “downtrodden” since the official news of the bankruptcy.
“The company, for the closing locations, has thrown most sales metrics out the window,” he tells Consumerist. “Before that? Trying to meet those metrics was a do-or-die thing.”
Steve, who has another full-time job, tells us that he’ll “probably stay on the ship until it sinks.”
“I work with an absolutely great crew and this has been one of my favorite jobs, even if I was frequently scratching my head,” he tells Consumerist. “For some reason I feel the need to be the last one to shut off the lights. ”
Consumerist reached out to RadioShack regarding the issues raised by the employees we spoke to. The company did not address the claims that prices had been raised in apparent anticipation of clearance sales, but did send the following statement:
“We receive daily feedback from our store team members, and the feedback regarding the clarity and frequency of communications about this week’s Chapter 11 filing has been positive. Employees at the approximately 200 RadioShack stores that are in the process of closing as well as employees at the RadioShack stores that Sprint will take over have received frequent and timely updates. It is business as usual at our remaining stores and on RadioShack.com.
“Given the rapidly developing events, it’s possible that certain team members at closing stores missed these communications.
“We greatly appreciate the hard work and dedication of all our talented, dedicated employees, and we will continue to work with our advisors and stakeholders to preserve as many jobs as possible in the Chapter 11 process while maximizing value for our creditors.”