Radio Shack Growth CEO
New CEO Aims for Growth
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David Edmondson, who will take over as RadioShack's CEO on May 19, wants employees to be hopeful and inspired, but aware of competition.
New CEO aims for growth
By Heather Landy
Star-Telegram Staff Writer
FORT WORTH - Working diligently behind the scenes has been David Edmondson's modus operandi at RadioShack for 10 years. That's not about to change just because he is being promoted to chief executive.
Edmondson, who will take over as CEO on May 19, has a plan to make Fort Worth-based RadioShack a growth company again. But true to form, he prefers to accomplish his goal in small increments, periodically issuing progress reports and letting outsiders figure out his strategy on their own.
"I know exactly where we're going to go," Edmondson said in an interview at the company's new downtown campus. He then sidestepped the obvious question: Where?
The 45-year-old has left a trail of clues over a decade of deal-making at RadioShack, where he rose from vice president of marketing to chief operating officer. While being groomed to succeed CEO Len Roberts, Edmondson took a big role in two recent efforts: forming product development alliances with technology firms and landing deals to manage wireless phone kiosks for Sprint and Sam's Club.
Both initiatives play up RadioShack's experience in operating small retail spaces and bringing new technology to the forefront -- legacies that Edmondson is likely to draw on as he reshapes the company to rev up sales growth.
In each of the first three quarters of 2004, sales never rose more than 3.6 percent, lagging far behind the pace of earnings growth as the company slashed costs and geared its stores toward more profitable lines of merchandise.
Those numbers tell a story, as numbers tend to do for Edmondson, who is known for being a relatively reserved man with a soft spot for spreadsheets.
In the beginning
Born in Boston, Edmondson grew up in places as varied as Germany, South Carolina and Colorado because of his father's assignments as an Army drill sergeant. When Edmondson left home at 17 to attend a small Baptist college in California, his father -- who according to Edmondson made the title character in Pat Conroy's novel The Great Santini look "like a wimp" -- was not impressed and suggested that he find a job instead.
Edmondson did both, working his way through school. Work was nothing new to him; as a young boy, he saved up for a watch he wanted by taking out neighbors' trash.
"I learned later the value of being able to set your own price," joked Edmondson, who still has the Timex he bought at the base PX. As a teen-ager in Colorado, he ran a lawn-mowing and snow-shoveling service and bought a bicycle shop.
After college, where he majored in theology and psychology, Edmondson took a job at a church in Colorado and met the young teacher he would marry. Debra Edmondson had spurned an initial matchmaking attempt by a mutual acquaintance. But she changed her mind a few weeks later, when for the first time she heard the young assistant pastor at the church deliver the dismissal prayer.
"Not listening to the words at all, I just thought, 'This guy is going somewhere,' " Debra Edmondson said. "He just always had this persona about him, that whatever he did, he put his all into it."
Seeking financial security for his young family, David Edmondson began a career in marketing that took him from Omaha to the Northeast and then to Texas. His family now lives in Southlake, where his wife is active in local politics and serves on the Planning and Zoning Commission. They have a 16-year-old daughter and two sons, 21 and 24.
A changing profile?
At RadioShack, David Edmondson kept a relatively low profile while Roberts, as CEO, built a reputation for energizing employees and represented the company in civic and philanthropic endeavors. But now that he is taking over as CEO, Debra Edmondson suspects that her husband will surprise people with his skills as a motivator and communicator, which he honed as a pastor.
"Len definitely is a personality. But I think people will find out that David is, too," she said.
With Roberts' blessing, David Edmondson has already started making changes. He shuffled the management team and chose four senior vice presidents as his top lieutenants: Don Carroll, head of marketing and advertising; Jim Hamilton, who was named chief merchandising officer; Stuart Asimus, who now handles store, dealership and Internet operations; and Edmond Chan, who as chief strategy officer oversees a newly created division for business development, product development, and manufacturing.
Edmondson led a town hall-style meeting with employees this month, after it was announced that he would become the company's next CEO.
"I really want to inspire people as to what this company can be," he said. "That's instilling them with hope. But there are a lot of competitors out there that are bigger than us and faster than us, so I also have to instill a sense of fear, that you can't stay in one place."
That's where the company's new product development alliances and kiosk operations come in. In late 2003, RadioShack began pairing up with technology companies in hope of creating a pipeline of new products for the stores and reviving the chain's reputation for ingenuity.
"Dave personally helped drive this," said Charlie Mollo, CEO of Arizona-based Mobility Electronics, which has been working with RadioShack to develop a line of power adapters for a range of consumer electronic devices. "It was very clear to us that they were looking at the innovation and technology part of this as a way to prove to the world that they could really drive change."
RadioShack reported strong holiday sales of the Mobility products, which some on Wall Street interpreted as a sign that the retailer could jump-start sales in areas aside from the chain's thriving wireless phone business.
"We are gaining confidence that management can meet its guidance to the Street for 2005 based upon a continuation of superior performance in wireless and progress in re-merchandising the rest of the store," KeyBanc Capital Markets analyst Jeff Stein wrote in a note to clients this month when he raised his rating on RadioShack's shares from "hold" to "buy."
Others on Wall Street are waiting to be convinced. For every analyst who has a "buy" or "strong buy" rating on the stock, there are two who rate it a "hold" or a "sell," according to Bloomberg data.
Edmondson said the company has another source of sales growth that it has only begun to mine. RadioShack last year opened 55 Sprint kiosks in malls around the country and plans to have 500. The RadioShack name is not visible on the kiosks. In tests, the kiosks often attracted customers who typically would not visit a RadioShack store, Edmondson said.
RadioShack also recently took over 550 wireless phone kiosks at Sam's Club stores.
Edmondson sees great promise in RadioShack's ability to manage retail sites for other companies.
Annual sales at RadioShack stores average less than $390 per square foot, but the company expects that RadioShack-operated kiosks will pull in more than $5,000 per square foot.
"In any retail concept, that's a home run, and it's something we are uniquely capable of doing because we know how to operate small-footprint stores," Edmondson said.
Posted by Craig at February 1, 2005 04:36 AM