Can Asian Franchise Growth Save RadioShack? (RSH)

RadioShack Corporation (NYSE: RSH) is putting its hope that international growth will drive a long overdue and hoped-for turnaround.  The company has announced a very large franchise growth pact under a master development agreement to expand its global footprint across 10 Southeast Asian countries. This would effectively double the number of international franchises and will give it a footprint of 39 nations if all franchise locations are opened in the total of ten more ASEA nations.

Under the long-term agreement, Berjaya Retail Limited is expected to open at least 1,000 franchise locations as franchise developer across the ASEA nations within the first 10 years. Berjaya Retail’s subsidiary in Malaysia, Berjaya RS Sdn. Bhd., expects to open its first RadioShack locations later this year in Kuala Lumpur.

Berjaya Retail Berhad is owned by the major shareholder of Berjaya Corporation, which reported combined revenues of $7.06 billion (USD) across its holdings in fiscal year 2011.  This is the outfit that operates the 7-Eleven and Singer brands that have a combined network of 2,000 stores.

Here is the problem… RadioShack shares just hit yet another 52-week and multi-year low of $6.43 today, but shares are currently up $0.02 at $6.50 on the day.  The 52-week trading range was previously $6.48 to $16.70.

JON C. OGG