FORT WORTH, Texas -- Struggling consumer electronics chain RadioShack has filed for Chapter 11 bankruptcy protection, reported the Associated Press. It plans to sell 1,500 to 2,400 stores to its largest shareholder, Standard General, and has filed a motion to proceed with closing the remainder of its 4,000 U.S. stores.
Wireless carrier Sprint Corp. has a deal with Standard General to open mini-shops in as many as 1,750 of the RadioShack stores Standard General is buying. Sprint would occupy about one-third of the retail space in each RadioShack location, and Sprint employees would sell mobile devices and plans.
Sprint would be the primary brand on those RadioShack storefronts and in the chain's marketing materials.
Sprint has more than 1,100 company-owned retail stores, which would more than double if the transaction is approved. It is expected to be finalized in the coming months. But other parties could bid for RadioShack's stores in the bankruptcy process.
The Fort Worth, Texas, company also is having discussions to sell all of its remaining assets overseas.
Much like the convenience store and gas station industries, the electronics chain has been tasked over the years with adapting to changing consumer habits and new technologies. RadioShack Corp., which was founded in Boston in 1921, started as a distributor of mail-order ship radios, ham radios and parts. It 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 shifted to making purchases online and growth in its wireless business slowed. It has suffered years of losses.
RadioShack worked hard on its turnaround efforts, hiring Walgreen Co. executive Joe Magnacca as its CEO and former Treasury Department adviser Harry J. Wilson as chief revitalization officer. The company, which has not turned a profit since 2011, employs about 27,500 people worldwide, according to the news agency, citing its last annual report filed with the U.S. Securities & Exchange Commission (SEC).
It is seeking court approval to keep paying employees and honor customer programs and keep operating as it restructures.
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