RadioShack Getting Walloped In The U.S. Focuses On Southeast Asia

by Trefis Team
-13.20%
Downside
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Market
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Trefis
RSH
RadioShack
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RadioShack (NYSE:RSH) has plans to expand on a major scale in Southeast Asia. The consumer electronics retailer is struggling in the U.S. amid the volatile economic environment and increasing competition from online retailers. It faces competition from brick and mortar retailers such as Wal-Mart (NYSE:WMT), Target (NYSE:TGT) and Best Buy (NYSE:BBY) as well as online players like Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY).

RadioShack has partnered with Berjaya Retail Berhad, a Malaysian retail group, to expand its footprint in Southeast Asia. It plans to extend its franchise locations to 10 countries in Southeast Asia with plans to open at least 1,000 sites within the next 10 years. Radioshack seems to be looking at international markets for growth. Until now, it majorly focused on its domestic operations, with about 4,480 stores in the U.S. compared to over 500 globally.

We consider international expansion a wise move by RadioShack given the stiff competition it faces in the U.S. The company has also reset expectations for 2012 and expects lower bottom-line numbers for 2012 compared to 2011, and anticipates a challenging first quarter for this year. Focus on global operations will be key for RadioShack as it could provide a boost to its top-line numbers in the long term.

See our complete analysis for RSH stock here

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