Radioshack declares second bankruptcy, plans to close 200 stores
- Author: Zachary Reyes Mar 09, 2017,
Mar 09, 2017, 18:06
The owners of RadioShack filed for chapter 11 bankruptcy protection for the second time in two years, potentially spelling the liquidation of the longtime electronics retailer.
The electronics chain now operates 10 stores in Western Mass., and one store in Worcester and over 30 in the eastern part of the state.
It proved less successful than at least RadioShack had hoped, and it is closing about 200 stores and evaluating options on the remaining 1,300. RadioShack sought to restructure $1 billion in debt in 2015, selling 1,740-plus stores for $26 million to hedge fund Standard General at a bankruptcy auction that was marked by a battle with hedge fund Salus Capital, which had warned against the significant credit bid in that sale.
He said the carrier will convert several hundred RadioShack locations to carrier-owned Sprint stores, and will move its signage, displays and inventory from the remaining 1,000 or so co-branded RadioShack stores to other Sprint-owned locations.
While the official General Wireless line is that it is reviewing options for the remaining stores, Bloomberg is reporting that sources say these RadioShack locations will likely be liquidated.
CEO Dene Rogers told The Wall Street Journal the bankruptcy was as a result of "surprisingly poor" mobile electronics sales as consumers flocked to Apple and online retailers like Amazon to purchase cellphones and high-profit accessories like cords, batteries and cases.
Radio Shack has not confirmed which stores will be closed.
Sprint's challenges, which led to sales dropping "precipitously" towards the end of a year ago, meant RadioShack received less than expected in commission, RadioShack said in papers filed on Wednesday. "We will redeploy to other Sprint stores assets such as signage, displays and inventory now at RadioShack locations which are closing", Crull's statement said.
"Best Buy has found its way through the wreckage and stabilized its business, but hhgregg, a smaller furniture and electronics chain, filed for bankruptcy on Monday and said it would close one third of its stores", Wahba continued.