Friday, April 29, 2005

He never will stray, with a name like the one that he's got today

This was a going concern during the time I was employed at Radio Shack, and it appears to have finally come to a head: U.S.-based RadioShack Corp., which has won a court battle over the use of its name in Canada, is poised to begin an aggressive launch of its own stores under its namesake. The rollout will make it even more difficult for Circuit City Stores Inc. of Richmond, Va., to raise awareness of its new banner --The Source by Circuit City -- after a ruling that its Canadian RadioShack outlets will have to be renamed, observers said. "It's a challenge," said Wendy Evans of retailing consultancy Evans & Co. "RadioShack is such a well-known name. For the average person, there's going to be confusion, for sure. They'll wonder who is The Source by Circuit City." Canadian RadioShack stores are currently run under a licensing agreement by InterTan Canada Ltd. But InterTan was acquired last year by Circuit City, setting off the legal fight over the RadioShack name. Circuit City is the second-largest U.S. electronics chain and RadioShack didn't want its name -- and products -- to help bolster a key competitor. A Texas court ruled recently that the Canadian stores will have to drop the name RadioShack by the end of June. What'll hurt the existing stores, in addition to the corporate rebranding itself, is the problem of existing stock. Most Radio Shack-branded merchandise was replaced, over the past year, to Nexxtech and Centrios labels; in many cases, the product was identical, just rebranded, in order to better share inventory with Circuit City. But the store I worked at still had a considerable amount of older stock, with the older brand names, and it's one of the highest-volume locations in the country. How much stock will smaller, quieter stores have to send back to warehouses to be repackaged? This isn't going to be a good year for InterTan, I suspect.

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