RadioShack’s bankruptcy is now official for it has filed for Chapter 11 bankruptcy protection in the court at Delaware and would sell as many as 2400 stores to an affiliate of hedge fund Standard General, its lender and the largest shareholder and Sprint. Other underperforming locations will be closed for good, says the report.
Contradicting to the rumors, it is not Amazon who will be buying the bankrupted stores of RadioShack but Sprint apart from the Standard General. As per the agreement, RadioShack’s brand will live on through store-in-a store that would allow the brand name to exist in as many as 1750 of the acquired stores. The branding of the surviving stores would mainly feature Sprint, according to a statement from Standard General.
RadioShack reported assets of $1.2 billion and debts of $1.3 billion, as on Nov 2014 according to Reuters. The sick retailer was expected to shutdown around 500 stores early in 2014, but the reducing revenues and poor performance caused the company to knock this figure to 1,100 in bid to save money. However, the plan was foiled when hear that the company has failed to show profit since 2011 and its fate had been a regular topic of speculation in the retail and corporate restructuring circles.
The company even tried to revitalize the brand image with concept stores, new logo and new advertisements but it failed to pay off. The retailers shares crashed to $0.24 from $1 in the early part of 2015 when the company was suspended from the New York stock exchange earlier this week. Its saddening to hear that the company has failed to show profit since 2011 and its fate had been a regular topic of speculation in the retail and corporate restructuring circles.
Wireless analyst Jeff Kagan said RadioShack’s loss is a win for Sprint. He also said that though it is sad to see the RadioShack in so much trouble, he is also happy for Sprint to gain lot of retail storefronts and thereby gaining more market share. Also, this opportunity would provide Sprint with more storefronts to sell wireless devices which is very important to go forward.
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