Summary of the Article
RadioShack Corp. has filed for Chapter 11 bankruptcy protection. Wireless carrier Sprint hopes to open mini-ships in many of its remaining stores.
NEW YORK — Sprint’s latest plan for luring new subscribers is to occupy the remains of RadioShack.
The long-struggling consumer electronics chain filed for bankruptcy protection Thursday. Part of its plan is for Sprint, the No. 3 U.S. wireless carrier, to open mini-shops in as many as 1,750 of RadioShack’s remaining stores.
Sprint Corp. has been aggressively trying to draw subscribers from its bigger rivals, Verizon and AT&T.
It’s had some recent success, adding nearly one million new customers in its latest quarter. And if approved, the deal would greatly expand its presence in front of U.S. shoppers, more than doubling the number of Sprint company-owned stores.
RadioShack, which was founded nearly a century ago, said in its Chapter 11 filing that it plans to sell 1,500 to 2,400 stores to its largest shareholder, investment firm Standard General. It is seeking to close the remainder of its 4,000 U.S. stores.
RadioShack Corp. introduced one of the first mass-market personal computers and used to be the go-to stop for consumers’ home electronics needs. But it struggled as shoppers increasingly moved online and growth in its wireless business slowed. It has suffered years of losses.
The company, which has not turned a profit since 2011, employs about 27,500 people worldwide, according to its last annual report filed with the U.S. Securities and Exchange Commission.
It is seeking court approval to keep paying employees, honour customer programs and keep operating as it restructures.
RadioShack said Thursday that it also has more than 1,000 dealer franchise stores in 25 countries, stores operated by its Mexican subsidiary, and operations in Asia operations, which are not included in the Chapter 11 filing. It wants to sell them.
There are no RadioShack stores in Canada. The Canadian stores started operating as The Source by Circuit City in 2005. The Source stores were purchased by BCE in 2009 after Circuit City went bankrupt.
RadioShack, which was founded in Boston in 1921, started as a distributor of mail-order ship radios, ham radios and parts. In the 1950s, it entered the high-fidelity business, touting a device called the “Audio Comparator,” a then-novel switching system that allowed the customer to mix and match components and speakers in the listening room.
In 1977, the chain started selling the TRS-80, known affectionately by its users as the “Trash 80,” making the RadioShack as important in microcomputers as IBM or Apple.
first published: 2015-02-05 19:03:09