CBS Radio Interview With Bradley Snyder Regarding The Sale Of RadioShack’s Brand
–Below is an interview conducted on May 12, 2015 by KCBS in San Francisco with Bradley Snyder, Tiger Capital Group. At the time of the interview Standard General LP, had placed a bid of $26.2 million for RadioShack’s brand name and customer data – subject to approval by the bankruptcy judge in Wilmington, Delaware. Standard General had purchased 1,700 RadioShack Corp. store leases in March.
Susan: So just how much is a company’s name worth after it’s gone bankrupt? Today, Radio Shack’s remaining assets, including its name, will be auctioned off. Some estimates say it can go for as much as 20 million dollars, but whatever the price it’s not going to do much to offset the company’s more than 1 billion dollar debt. For more now we are joined live on the KCBS ring central news line by Bradley Snyder, Executive Managing Director of Tiger Capital Group. Mr. Snyder thanks for your time this morning. Why would anybody want to buy that Radio Shack name? Does that company have a second life somewhere?
Bradley Snyder: Well, first of all Stan and Susan thank you so much for having me. The short answer on that one is – it really depends, and we will know more this afternoon, or tomorrow at the latest. Standard General is the private equity firm that is going to do a go-forward with Sprint and keep over 2000 stores. I look at this and I say ‘if you had 2000 signs on your buildings and you didn’t want to replace them – what’s that worth? And if you had bags and marketing and branding and you wanted to see if you could transform that Radio Shack name – what’s it worth?’ And I think we will find out this afternoon. An alternative bidder to that might be something like a Chinese manufacturer who comes in and decides that they need an iconic American name to sell their products and whether they are sold in stores or via wholesale, it might be an interesting play for them depending on what the product is.
Stan: I mean you have yourself been involved in some of these rescue operations – some that worked and some didn’t. Does the name carry baggage both good and bad?
Bradley Snyder: The answer is yes and yes. For instance, I was involved in Sharper Image, Linens and Things, Loehmann’s, Bombay Company, different things like that. And what you need to do in each instance is all fact specific. You need to look at the name, figure out whether there’s some sort of authenticity to it, and then figure out what to do with it. For instance, Linens and Things we put online and we ended up licensing it to Canadian Home Outfitters, which is like a TJ Maxx type store in Canada. And that was a great success and we sold it to a company called Galaxy for about 6 times our money. With Sharper Image we took the licensing from roughly 2 million dollars when we acquired it through bankruptcy to close to 14 million dollars and sold that to Iconix. So again, it depends on the brand itself and whether it carries to the general population.
Susan: If Radio Shack were to try to make that transition from a brick and mortar to simply an online store… does the fact that it has a kind of nerdy reputation hurt it?
Bradley Snyder: Well, I think they can do whatever they want. I think they would have a challenge taking it online – they would be competing straight on with Amazon, and Amazon is so very good at what they do. I suspect that its more likely than not that Radio Shack could be acquired. If the private equity fund didn’t acquire them or a Chinese manufacturer didn’t acquire them, theoretically a TJ Maxx or someone like that could decide they want an electronics store-in-a-store, and have a department in every TJ Maxx store or Homegoods store and call it ‘Radio Shack’. I could envision that.
I also envision that the go-forward Sprint stores with the Radio Shack name, assuming that Standard General buys them, might be your real high-margin (goods) – lost ear buds, extension cords, batteries – the types of stores that pop up in airports now. And, that might be a nice match for Sprint, because Sprint would be driving the traffic.
Stan: Appreciate your time this morning Bradley Snyder Executive Managing Director of Tiger Capital Group… the day that should see the auctioning off of the iconic name Radio Shack.