Radioshack, the popular electronics retailer is all set to close 187 stores in this month as it files for bankruptcy for the second time in just two years. This time, the retailer is closing up 9% of its total of 1,943 stores after it becomes unable to manage the debts.
One of the greatest electronics chains has its origin in Fort Worth, Texas. In 2015, Radioshack filed for bankruptcy for the first time and it closed about 2400 stores. General Wireless, the joint venture of Sprint and Standard General acquired Radioshack and it took control of 1,518 stores. General Wireless filed for Chapter 11 bankruptcy in Delaware stating that it is closing down 187 stores. In addition to these, Radioshack also plans to close 360 stores that are shared by Sprint. The company is also evaluating about the future of the remaining 971 shared stores.
This move affects 1850 employees of the 5000 employed by the company. Sprint purchased the 115 store leases from General Wireless, paying $12 million. Sprint also became the primary tenant for 245 more stores owning furniture and equipment. On March 13th, the stores apart from those closing down will continue to operate, but the company is using other options during the bankruptcy process. Radioshack.com online portal is launched to encourage clearance sale of the goods.
Radioshack has a long history of 96 years as the company began selling radios and other equipment since 1921. For all sorts of electrical and electronic products such as mobile phones, loudspeakers, satellite TVs, toys and batteries, Radioshack became the one-stop shop. Radioshack gained immense popularity as it sold the first fully assembled TRS-80 PC running an operating system developed by Bill Gates. Bill Gates later went on to become the founder of Microsoft and emerged as the legend that he is today. In 2013, Radioshack became the eighth biggest consumer electronics dealer.
However, the sales volume declined for Radioshack as the company reported that it had to endure a loss of $200 million in mobility business. The company went on to file for bankruptcy for the first time, closing about 200 stores. Dene Rogers, CEO and President of Radioshack acknowledged and appreciated the efforts of his staff who were working hard to inject new life into the brand. In early 2015, Radioshack agreed to set up Sprint Team at Radioshack co-branded stores hoping that it would boost the sales. By the end of 2016, the revenue for Sprint had dropped and apparently, Radioshack couldn’t generate mobile commissions as expected. Radioshack has plans to redeploy Sprint’s assets to other stores that will continue to operate.
The Sprint employees currently working at Radioshack stores that are scheduled to be closed will be given opportunities to transition to the other Sprint partnership stores. The retailer now focuses on emphasizing on the Sprint brand. Radioshack hopes that the second bankruptcy would give it a chance to find out whether it can run a sustainable business henceforth. According to the bankruptcy filing, Radioshack has trade debt of $62.9 million, $65.2 million of liens, and $10.2 million of unpaid rent.