RadioShack Heads To Asia For Growth

RSH: RadioShack logo

RadioShack (NYSE:RSH), which is trying to build presence in Asia, has partnered with Cybermart, an affiliate of Hon Hai Precision, to operate small-format retail stores in China, Taiwan, Hong Kong and Macau. It plans to sell consumer electronic products, accessories and related services through these stores. The first store is scheduled to open in Shanghai next month. [1]

RadioShack will hold a 49% stake in the joint venture and the rest will be held by Cybermart. This is RadioShack’s second joint venture in Asia. In March, it announced a partnership with Berjaya Retail Berhad, a Malaysian retail group, 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. (See our previous post: RadioShack Getting Walloped In The U.S. Focuses On Southeast Asia)

The increasing dominance of online retailers like Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY) has impacted RadioShack’s operations in the U.S. Its performance in the recent quarters has been weak, and it’s trying hard to keep up with the intense competition. It has also reset expectations for 2012 and expects lower bottom-line numbers for 2012 compared to 2011.

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We believe international expansion could provide a diversified revenue stream to RadioShack and also help it leverage its brand and expertise in new emerging markets.

See our complete analysis for RSH stock here

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  1. See: 8k Filing, June 7, 2012 []