RadioShack announced in September of a possible bankruptcy but managed to remain in business after receiving rescue financing. The company finally filed for U.S. bankruptcy protection late Thursday and plans to sell 1,500 to 2,400 of its 4,000 stores to investment firm Standard General, its largest shareholder. The remainder of its stores will be closed.
Sprint Corp went on a deal with Standard General about opening a number of mini-stores in as many as 1,750 RadioShack stores that are being bought by the firm. The wireless carrier will occupy around one-third of the retail space in the stores where it will sell mobile devices and Sprint plans. Moreover, Sprint would be the primary brand on each of the RadioShack storefronts as well as marketing materials.
As previously reported in Tech Times, RadioShack and Sprint had a number of talks on co-branding the stores. If the negotiation pushes through, the stores would be dual-branded which means that they would carry both the name Radioshack and Sprint. The latter's CEO, Marcelo Claure, announced before that the company has plans to increase its retail locations.
According to Claure, the deal will "allow Sprint to grow branded distribution quickly and cost effectively." He noted that RadioShack had "incredible store locations" and believed that acquiring some of them would alleviate the long waits that customers usually face at Sprint's current stores.
"Customers have to wait one or two hours to get a phone and that's not acceptable," said Claure.
RadioShack is also in talks on selling all of its remaining assets found overseas.
The company is credited with the introduction of one of the first mass-market personal PCs. It was also a former go-to stop for those who are looking for home electronics. However, it had to face several years of struggle as more and more shoppers turn into online shopping and as its wireless business slowed down in growth. It suffered huge losses for the last 11 consecutive quarters and has not turned a profit since 2011. Based on its worldwide records, RadioShack has around 27,500 employees.
RadioShack's bankruptcy announcement came as a no surprise. On Monday, the trading of its shares was suspended by the New York Stock Exchange. The company has also revealed that some of its locations have been converted into clearance stores.
"The surprise is that they survived this long," said Michael Pachter, an analyst at Wedbush Securities. "I didn't think they'd last through Christmas 2013."
