Schaak Electronics
| Company type | Public (after 1972 IPO) |
|---|---|
| Industry | Consumer electronics retail |
| Founded | 1957 |
| Founder | Leander Schaak |
| Defunct | 1986 |
| Fate | Bankruptcy and liquidation |
| Headquarters | St. Paul , United States |
Area served | Minneapolis-St. Paul area, Milwaukee, Chicago, other locations in Minnesota |
Key people | Richard L. (Dick) Schaak (owner, CEO), Larry H. Welch (former CEO) |
| Products | Audio equipment, personal computers, other consumer electronics |
Number of employees | 250 (at closure) (1986) |
Schaak Electronics was a consumer electronics retailer situated in the Minneapolis-St. Paul area. Originating in the early 1970s with a focus on audio equipment, the company later broadened its product range to include personal computers and various other electronic devices. Despite becoming the largest enterprise of its kind within the region, Schaak Electronics ceased operations by the mid-1980s.
Initially established as a business specializing in audio products under the leadership of Richard L. (Dick) Schaak, Schaak Electronics expanded into personal computing (under the name Digital Den) and other consumer electronics throughout the 1970s until approximately 1986. The company was headquartered in St. Paul, Minnesota.[1][2][3]
Founding and Early Development
The roots of Schaak Electronics trace back to a modest radio and television repair shop established in South Minneapolis in 1957 by Leander Schaak. In 1960, his son Richard—commonly known as Dick—left school to join the family business and assumed control after Leander’s sudden passing that October.
As Dick gained experience managing the company, he placed an emphasis on marketing and specializing in audio equipment. By 1971, he had grown the enterprise to encompass ten retail outlets: eight within the Twin Cities and additional stores in St. Cloud and Rochester. Two years later, expansion extended to Milwaukee and Chicago locations. In recognition of his achievements, Dick Schaak was honored by the Jaycees as one of Minnesota’s ten outstanding young men in 1972.[4]
Schaak Electronics went public with an initial public offering in 1972; at that point Dick Schaak retained approximately an 80% ownership stake. The company was then characterized as a retailer specializing in audio equipment designed for both home and office environments.[5]
In a significant move during 1973, Dick Schaak acquired Allied Radio stores after Tandy Corporation was compelled to divest them. This purchase included eight outlets in Chicago plus nineteen additional locations elsewhere, effectively doubling the size of Schaak Electronics.
By late 1974, Schaak Electronics had begun promoting itself via local radio stations in the Twin Cities area, airing commercials on KTCR-FM featuring characters named Uncle Allie and his nephew Timmy.[6] These mascots were also featured in mid-1970s catalogs jointly branded Schaak Electronics - Allied Radio.
However, this rapid expansion coincided with economic downturns in the United States which adversely affected profitability. Despite rising sales figures in both 1974 and 1975, the company incurred financial losses. Attempts to reduce expenses by shuttering certain stores were insufficient to prevent filing for Chapter 11 bankruptcy protection during spring of 1975. Over the following two years, Schaak Electronics engaged in protracted negotiations with creditors including American National Bank and Manufacturers Hanover.
By 1976, financial disputes with lending institutions had been settled and the company returned to operating profitably. Profit growth continued through to at least 1978 when all creditor obligations were fully repaid.
In 1977, Schaak Electronics inaugurated its fifteenth retail location at Burnsville Center located in Burnsville, Minnesota.[7]
Entering the decade of the 1980s, annual sales were reported near $50 million with a strong upward trajectory.[8] By mid-1984 forecasts anticipated revenues reaching $80 million across a network of approximately sixty stores.[9] The brand’s radio advertisements became widely recognized locally for their distinctive sound effects linked with the company name.[10]
Dick Schaak earned respect within the Twin Cities community and notably served as King Boreas Rex XLV during the St. Paul Winter Carnival held in 1981.[11] This role enabled him to issue a commemorative 'gold' medallion bearing greetings from Schaak Electronics along with his signature.[12]
In addition to retail operations, Schaak launched Schaak's Computer Academy at Maplewood Mall in Maplewood, Minnesota in 1983. This facility provided instruction on personal computers through various courses scheduled during daytime hours as well as evenings and weekends. The mall location aimed to attract walk-in customers and boost enrollment figures. The academy subsequently relocated to premises in Mendota Heights.
Downturn and shutdown
On July 10, 1985, Larry H. Welch stepped down from his positions as chairman, chief executive officer, and director of Schaak Electronics Inc., citing that he had been compelled to resign after serving less than two months in these capacities. Subsequently, Richard L. Schaak reassumed these leadership roles. The same year marked Schaak Electronics' bankruptcy filing, leading to the liquidation of its assets.
On Friday, February 14, 1986—Valentine's Day—the company unexpectedly shuttered its remaining 21 retail locations and terminated approximately 250 employees. The entirety of Schaak Electronics' inventory was acquired by Sound of Music, which later evolved into Best Buy. On April 25, 1986, the firm organized a significant clearance event at the Minnesota State Fairgrounds, generating around one million dollars in sales during that single day.
Public records provide minimal insight into Dick Schaak's endeavors following the closure of his business. In a 2008 interview reflecting on the downfall of the Petters empire, Schaak recalled Tom Petters as an exceptional salesperson at Schaak Electronics. It appears this respect was reciprocated; Petters has remarked that "Schaak made a big impression on me," referencing his personal acquaintance with Dick Schaak.
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