Tandy Corp says that the planned spin-off of its new TE Electronics manufacturing subsidiary should be completed by the summer of 1993. The new company will have 25 manufacturing operations, with 21 of the facilities in the US, three in Asia and one in Europe. It will also have four research and development centres, three in the US, one in Asia, and 10,000 employees. The business will not show a profit in fiscal year 1993, which ends this June, but is expected to turn profitable in the next fiscal year, Bill Bousquette, the new company’s chairman told Reuter. For the six months to December 31 1992, TE Electronics reported a net loss of $53m, contributing to Tandy Corp’s plunge in profits for the period (see below). The company has been operating independently since January 1, and is not yet being treated as a discontinued operation by Tandy, although that should happen next time the company reports. The consumer electronics and furniture segment of the new company is profitable, Bousquette said. Our challenge is in the personal computer business. The company has plans to turn that around by entering channels such as telemarketing mail order, seeking opportunities with other firms, and a new pen-based product, he said. As for the parent TE is leaving behind, Tandy is expected to show solid profits in 1993, John Roach, chairman and chief executive said. We would expect calendar year 1993, based on the early performance and based on last year, to be a good solid year from a profit perspective, Roach told the news wire. He observed that the retail end of the business, which will comprise Tandy Corp after the manufacturing side is spun off, showed earnings of $2.10 a share for 1992. Roach said while the Radio Shack stores have shown strong profitability, sales growth in Computer City stores has been nothing short of phenomenal and Incredible Universe stores will continue to show sales growth. The economy probably is better than it was a year ago, the computer retail business is strong and the general consumer electronics business at the present time seems to be running ahead of last year, Roach said. Tandy’s US retail sales for Aprch totalled $274.9m, up 13% on last year and stores open for more than a year rose 4%.
