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RadioShack Files For Bankruptcy, Partners With Sprint

The 94-year-old consumer electronics company has filed for Chapter 11 bankruptcy and entered into a partnership with mobile outfit Sprint.

Summary of the Article

The 94-year-old consumer electronics company has filed for Chapter 11 bankruptcy and entered into a partnership with mobile outfit Sprint.

Article

RadioShack has put up a good fight for a while now, but the fight is over. The 94-year-old consumer electronics company has filed for Chapter 11 bankruptcy and entered into a partnership with mobile outfit Sprint. RadioShack will sell up to 2,400 of its 4,000 stores to Sprint and hedge fund Standard General and operate mini-stores in as many as 1,750 of them. The rest of the stores will close.

In 1977, RadioShack sold one of the first computers. But for the last 11 quarters, the company has posted a loss, with experts telling The New York Times they had not expected the company to last beyond Christmas 2013. Among the many problems the company has is an antiquated reputation and stock that mostly serves customers with financial problems who are looking to purchase a mobile phone.

“The business of selling electronics was being pillaged by the Web, and a giant bet on cellphones fell apart when Apple Inc. ’s pricey iPhones started pulling the margin out of sales that had once been lucrative for RadioShack,” says The Wall Street Journal.

The Journal  also faults a lack of strategy which “handed power to bare-knuckled lenders.”

Then of course there’s the problem that any failing company has: no customers. You have to be relevant to customers with money if you’re going to keep your doors open.

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first published: 2015-02-05 17:37:30