Update directly from RadioShack
U.S.-based RadioShack Corp., which has won a court battle over the use of its name in Canada, is poised to begin an aggressive launch of its own stores under its namesake.
The rollout will make it even more difficult for Circuit City Stores Inc. of Richmond, Va., to raise awareness of its new banner -The Source by Circuit City - after a ruling that its Canadian RadioShack outlets will have to be renamed, observers said.
"It's a challenge," said Wendy Evans of retailing consultancy Evans & Co. "RadioShack is such a well-known name. For the average person, there's going to be confusion, for sure. They'll wonder who is The Source by Circuit City."
Canadian RadioShack stores are currently run under a licensing agreement by InterTan Canada Ltd. But InterTan was acquired last year by Circuit City, setting off the legal fight over the RadioShack name.
Circuit City is the second-largest U.S. electronics chain and RadioShack didn't want its name - and products - to help bolster a key competitor.
A Texas court ruled recently that the Canadian stores will have to drop the name RadioShack by the end of June.
"We are committed to ensuring we maintain a strong brand presence in Canada as soon as possible," Mike Kowal, an executive vice-president at RadioShack, said as he arrived in Toronto yesterday on a trip to look for locations across the country.
"Our goal is to be in some key cities in a key number of locations by this Christmas . . . Our goal is to be aggressive this year, and to have stores and re-establish our presence within the country."
He said RadioShack is determined to remain the dominant small-store electronics specialty chain in Canada. The new stores will have an updated and brighter look, he said.
Observers said it will not be easy for Circuit City's renamed RadioShack stores to attract customers to the new banner. And with RadioShack entering the country with the name, the job will be even greater.
Circuit City, through InterTan, now has more than 900 RadioShack stores, both corporate owned and franchises, in Canada.
Ms. Evans said a huge marketing campaign will be needed to explain the change to consumers.
And as RadioShack and Circuit City battle it out, big-box retailing titan Best Buy Canada, which also owns Future Shop, continues to expand across the country - providing further competition, she said.
