Adoption of Radio Shack name is expected
Thursday, May 18th 2000, 12:00 am
By: News On 6
Tandy Corp. became Radio Shack almost from the day a brash young businessman named Charles Tandy made a big bet on the consumer electronics business. It's just taken 37 years for it to become official.
Shareholders are expected Thursday to approve management's recommendation to change the Tandy name to Radio Shack Corp., finally fusing the well-known brand and the corporate identity.
In shedding the Tandy name, Radio Shack joins a host of companies changing or adjusting their monikers of late, seeking to reflect their dominant business in what consumers - and Wall Street - call them. Southland Corp., the Dallas-based national convenience store company, is 7-Eleven. Dayton Hudson became Target, the upscale discounter that delivers most of the profits to the department store company's bottom line.
And Hewlett-Packard, the Palo Alto computer maker, is putting its name more prominently on its products in an effort to burn the brand into consumer consciousness.
"We've seen several large companies trying to get more brand equity from their names. In Tandy's case, it's a return to their core identity," said Susan M. Broniarczyk, a marketing professor at the University of Texas in Austin.
In blending who they are with what they do, some companies move from the storied to the bland - Penn Central Railroad became American Premier Underwriters, an insurance company. Others turn to the alphabet. ShowBiz Pizza Time of Dallas, which operates mostly Chuck E. Cheese restaurants, switched last year to CEC Entertainment.
In a "rebranding strategy," FDX Corp. formally becomes FedEx Corp. on June 1, said spokeswoman Carla Boyd.
Meanwhile, the Internet has created a whole new kind of corporate identity crisis, one that experts say some companies may not overcome.
Many companies, of course, are named after their founders. The convention has worked well for some but not for others. PC Limited would have been another generic company had its founder, Michael Dell, not changed the name. But the Edsel will forever reflect poorly, if unfairly, on Edsel Ford.
But how many consumers know or care that Radio Shack is part of the famous Tandy family of Fort Worth?
"Consumers don't care what the company's name is. They think about brands," said Laura Ries, an Atlanta-based marketing consultant. Ms. Ries said Tandy's name change is "long overdue."
But Fort Worth's pride in a family business dating to 1919 made it difficult to think about change.
"We've been in Tarrant County for a long time, and it's hard to change the name of something when you've been involved with it a long, long time," said Dave Christopher, a senior vice president who started his career more than 30 years ago as a salesman in a Radio Shack store.
Charles Tandy cut a wide swath in Fort Worth.
He recognized in the early 1960s that Americans were fascinated with electronics, from tinkering with ham radios to changing out the tubes in their new television sets. Over the objection of some of the company's directors, he scooped up a nearly bankrupt Boston company that owned nine stores called Radio Shack.
Mr. Tandy had decided that the leather goods and crafts business he had inherited from his father, Dave Tandy, would never lead to fame or fortune. Both were important to the tough-talking, cigar-smoking young Navy recruit, who never forgot that Harvard Business School had once turned him down. (Sam Rayburn would later use influence to get him into the prestigious program.)
Degree in hand, Charles Tandy set out to make every home in the United States a Radio Shack customer. Mr. Christopher remembers the early days as fast-paced, heady times.
"We were opening stores as fast as we possibly could, sometimes two a day. We hit 1,000 stores and we thought that was incredible, and then we hit 2,000," he said.
By 1973, Radio Shack provided more than 50 percent of Tandy's sales and 80 percent of its profits. Tandy Corp. expanded into other retail businesses, such as department stores.
Charles Tandy was as colorful at the end of his career as he was at the beginning, dancing away the night and drinking Dom Perignon before switching to bourbon. He waved away chest pain by popping a nitroglycerin tablet the night before he died in 1979.
Most people don't know Mr. Tandy sold retail assets in the 1970s that weren't critical to the Radio Shack venture, said Mr. Christopher. "Charles had realized he didn't need those other businesses."
Tandy executives would later diversify again, launching a series of specialty electronics ventures - Computer City, Incredible Universe, Victor Microcomputer and Grid Systems. They mostly flopped.
Radio Shack endured and today boasts more than 7,000 stores that have kept pace with the latest consumer product innovations in telecommunications, computing and the Internet.
With its name change, Radio Shack also formally launches its Web site, RadioShack.com, part of chief executive Leonard Roberts' strategy for the "home connectivity" store.
But the Internet name game is more complicated than the corporate name game. Remember Cozone.com? That was CompUSA's ill-fated Web site, which has since been retired.
Ms. Ries said she advises companies setting up a Web store to consider a separate identity online, with some caveats.
"Don't adopt something generic. I see companies spending fortunes advertising an Internet name that does absolutely nothing to distinguish them as a brand," she said. "Are you going to remember Amazon or books.com?"
Don't forsake a valuable corporate brand name either. "Blockbuster wouldn't make it online as 'Videorentals.com,'" she said.
But masking an "old economy" technology with a new technology name can give your stock a short-term pop. To wit: After Dallas-based PageMart started calling itself WebLink Wireless Inc., its shares rose from below $10 to the mid-teens.
Those who knew him say Mr. Tandy, who capitalized on the popular demand for CB radios in the 1970s, would have been all for the Internet."Charles was always innovating," said Mr. Christopher. "He understood you needed to do that."