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This story appears in the December issue of Entrepreneur. A brown delivery box on wheels stops outside a HobbyTown in Fairfield, Conn. A muscular, bald-headed UPS driver hops down from the seat, marches into the low-slung building, and plunks a pound box next to the register. He pulls back the cardboard flaps to reveal a nest of curios wrapped in plastic: resistors, circuit boards, radial-lead electrolytic capacitors. Rosenblum opened his HobbyTown 11 years ago. For nearly a decade, a RadioShack sat a few doors down. But two years ago, that store shut down, and he started directing customers to another RadioShack across town.
Then that store closed, too, and Rosenblum did what every brick-and-mortar retailer hates to do: He told shoppers to look online. At its peak in , RadioShack had nearly 7, stores. For a brand with nearly years of history, the collapse was nothing short of spectacular. In July , RadioShack made an announcement that looked like a much-needed life raft: It was partnering with the HobbyTown franchise, and owners like Rosenblum would begin opening RadioShack stores-within-stores -- dubbed RadioShack Express -- to reestablish the electronics retailer in the metropolitan areas it had vacated.
In entering this partnership, the two brands are joining an ever-growing trend in the franchising world: brands shacking up, one setting up shop inside the other, and hoping sales happen better together.
But do they? Results across the industry are mixed. Building a new clientele of DIY tinkerers is bound to take time, and in the process, the RadioShack aisle could confuse customers, or waste precious retail space, or make customers wonder if HobbyTown is struggling alongside RadioShack. This just makes sense. But after finding the part, he lingered. Back in his office, he did some research and discovered that HobbyTown stores were concentrated in cities with at least , people -- the exact markets RadioShack had exited. His timing was perfect: Wilke was already encouraging franchisees to develop store-within-store partnerships with top-performing brands.
Select HobbyTowns were running pilot programs with Hasbro for toys and games, Traxxas for radio-controlled vehicles, and Lionel for model trains. Some , of those visitors click through to the store locator. HobbyTown franchisees could find themselves in those search results.
RadioShack Is Now Selling in Unexpected Places. Will Anyone Buy?
His presentation lasted five minutes, and afterward, he retreated to a booth. He hoped 50 people would come by, but it seemed like everybody was interested. The surge would be too much for RadioShack to ship at once. Within days, inventory left the RadioShack warehouse in Fort Worth. I thought this was RadioShack.
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And new customers are what HobbyTown is looking for. This is a long game -- and the franchisees know it.
Ring Up the Past With These Vintage RadioShack Cellphone Ads
The first RadioShack opened in Boston in , and the company grew slowly until , when it started franchising. In , it launched one of the first mass-market personal computers, but when heavy hitters like Dell and IBM took control of that exploding industry, RadioShack struggled to keep up. In a bid to stay relevant, it shifted its focus to batteries, refurbished electronics, and audio and video components.