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RadioShack zeros in on The Source!

I was sent this information in a e-mail from the www.hypecouncil.com

I am contacting you regarding your blog post about the legal battle over the RadioShack brand at http://www.biline.ca/xmods.htm I am with HypeCouncil, an online advertising and publicity agency working with RadioShack Canada. Because of the interest on your blog about this conflict, we wanted to provide you with these updates on the issue. There is misleading information circulating on the internet about the status of the RadioShack stores. Although the former RadioShack stores will soon be renamed, RadioShack Corp. is beginning an aggressive launch of new Canadian stores under its own name. I have included two articles below for placement and comment on your blog.

RadioShack zeros in on The Source; Electronics chain forced to change its name after U.S. parent wins legal case
by : Marina Strauss (29 April 2005)
taken from: The Globe and Mail - All material copyright Bell Globemedia Publishing Inc. or its licensors. All rights reserved.

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.

Retail battle for Canada heats up: RadioShack banner
by: Greg Wiles (7 May 2005)
taken from: National Post (c) 2005 National Post . All Rights Reserved.

SAN FRANCISCO - Circuit City Stores Inc. escalated its battle with RadioShack Inc. over the name on more than 900 Canadian stores, claiming its competitor issued an erroneous statement Thursday about the rights to the brand name. Circuit City issued a "clarification" to a RadioShack press release that said Circuit City was relinquishing use of the RadioShack brand in Canada in announcing plans to change the name of the stores to a "new, untested brand." Circuit City, the No. 2 U.S. electronics chain, and No. 3 RadioShack have been fighting each other in courts since Circuit City's purchase a year ago of InterTan Inc., a retailer that held rights to the RadioShack name in Canada.

In March RadioShack won a court ruling barring Circuit City from using its brand name in Canada after the end of June. On April 27, Circuit City said it would comply with the ruling and change the stores' names to "The Source by Circuit City" while appealing its rights to the RadioShack brand through 2009. "While we are disappointed by RadioShack's hostility and their legal manoeuvres, we are focusing our efforts on offering Canadian consumers and our dealers an even broader range of products and more attractive value," Circuit City said in its statement.

More skirmishes are expected between the retailers, with the next coming Monday when RadioShack makes a pitch to 330 independent businesses that operate RadioShack stores in Canada through an agreement with InterTan. It has scheduled a conference call to offer dealer agreements and its view that their agreements with InterTan aren't valid after June 30. "We've had a lot of inquiries from dealers over the last week who are particularly perturbed at facing the prospect of rebranding their store," said RadioShack chief supply chain officer Mike Kowal in an interview. "I think we are going to get almost all of them." RadioShack also said it plans to have as many as 30 company-owned stores in Canada by the end of this year.

"We will bring a renewed energy and focus with a fresh approach and better differentiation to improve the relevance of our brand to customers in North America," said RadioShack chief executive-elect David Edmondson in the statement. InterTan, which has more than 1,000 stores including the 330 dealer agreements, last year accounted for US$32.4-million of Circuit City's US$63.4-million profit from continuing operations before taxes. RadioShack has said fees it receives from InterTan are not material to its results. Circuit City believes its contracts with dealers on use of the RadioShack name remain in effect and has met with dealers to discuss the brand change, spokesman Bill Cimino said. He said the company will appeal the partial ruling by a Texas court once the judge issues a final ruling. "We've been pleased with the initial response we've gotten from dealers," Mr. Cimino said. That includes a number who have signed new agreements to operate as The Source stores.

He declined to give specifics. Circuit City has begun changing the name on the 520 Canadian stores it owns to The Source. It plans to spend an additional $22-million on advertising and promoting the change, Mr. Cimino said. Black & White Photo: Jean Levac, CanWest News Service / A RadioShack store in Kanata, Ont.: U.S. rivals RadioShack Inc. and Circuit City Stores are fighting over who gets to use the popular brand in Canada.

So as we can see XMods users may have some hope and Radio Shack fans will be glad to see a familiar name returning to Canada!

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