RadioShack has finally filed for Chapter 11 bankruptcy.
The failed electronics chain said it plans to sell up to 2,400 of its 4,000 US stores, but that doesn't mean the RadioShack brand is forever dead. Thanks to an agreement with Sprint and Standard General, the latter of which is purchasing many of RadioShack's stores, Sprint will operate a store-within-a-store at various RadioShack locations.
In other words, Standard General, RadioShack's largest shareholder (which led a rescue loan last year to help the retailer get through the holidays), will use its General Wireless affiliate to acquire up to 2,400 RadioShack stores. It will also partner with mobile carrier Sprint in a joint effort to operate as many as 1,750 of the acquired shops.
Sprint said it would not only operate a store within a RadioShack store, occupying approximately one third of the retail space at each location, but Sprint employees will sell mobile devices and plans for all Sprint brands, including Boost and Virgin Mobile, and these stores will be co-branded with Sprint on storefronts and in marketing materials.
Sprint currently has over 1,100 company-owned retail stores, but if the store-within-a-store agreement is approved by the bankruptcy court, Sprint will operate in an additional 1,750 stores (aka RadioShack locations). As for the rest of RadioShack's underperforming stores, the retailer wants to close them and sell their remaining inventory.
RadioShack first announced last autumn that it was looking at bankruptcy if talks about a sale or a restructuring didn't pan out, and then, just last week, the New York Stock Exchange issued a warning that it could delist the retailer due to RadioShack's average market capitalization staying below $50 million for more than 30 consecutive days.
Although RadioShack has failed to post a profit in four years, it has a workforce of approximately 27,500 people, according to SEC filings, and it reported assets of $1.2 billion and liabilities of $1.39 billion as of 1 November 2014.