Struggling electronics retailer RadioShack on Thursday filed for Chapter 11 bankruptcy protection and says it will sell up to 2,400 stores. The Fort Worth, Texas, company has suffered from years of losses.
RadioShack Corp. introduced the first mass-market personal computer and used to be the go-to stop for consumers' home electronics needs. But it struggled as shoppers increasingly shifted to making purchases online and growth in its wireless business slowed. The New York Stock Exchange suspended trading of its shares on Monday and sought to delist it. RadioShack had warned of a possible bankruptcy in September, but received rescue financing that kept it afloat. Still, its CEO recently cautioned the chain might not be able to find a long-term plan to stay in business.
Part of its bankruptcy plan calls for an asset purchase agreement with Standard General and Sprint to use a "store-in-store" model that would allow the RadioShack name to exist in as many as 1,750 of the acquired shops. Other underperforming locations would shutter. The branding on the surviving stores would primarily feature Sprint, according to a Standard General statement. RadioShack reported assets of $1.2 billion and debts of $1.3 billion, as of Nov. 1, according to Reuters.
Wireless analyst Jeff Kagan said RadioShack's loss is a win for Sprint. "While I am heartbroken to see Radio Shack in so much trouble, I am also very happy to see Sprint gaining lots of retail storefronts to gain market share," he said. "This will give Sprint many more storefronts to sell wireless devices from and that is very important going forward."
Additional reporting by Reuters, CNBC and NBC News