Thursday, 20 July 2017
Latest news
Main » RadioShack says failed Sprint deal led to bankruptcy filing

RadioShack says failed Sprint deal led to bankruptcy filing

10 March 2017

General Wireless, part of hedge fund Standard General, acquired the RadioShack trademark and many of its stores after its 2015 bankruptcy.

The store's website said 185 RadioShack's are closing this week.

At the time, Sprint viewed RadioShack's retail footprint as a way to quickly scale up its own business and RadioShack hoped to benefit from increased liquidity in the form of rent and commission payments from Sprint.

But several problems including a partnership with Sprint wireless that didn't go as well as expected contributed to the continued struggle, the company said.

Evidence contradicts all of Trump's claims about deadly Yemen raid
Intelligence recovered on a raid in Yemen is fueling US action to find people connected to a terror group. The vast region is known for its rocky mountains, which have been used by al-Qaida as a hideout.

RadioShack, based in Fort Worth, Texas, filed for Chapter 11 bankruptcy protection Wednesday in Delaware. Following the closures, about 1,300 RadioShack stores will remain open.

Bloomberg reported that General Wireless created a financing package in 2015 that included a $50 million asset-backed credit line, led by RBC Capital Markets, and another $25 million term loan from Great American Capital Partners. RadioShack also has closed more stored and slashed operating expenses by more than 20%, but it wasn't enough. The company had first reported bankruptcy in the year 2015 when mobile phones had started giving them a tough competition.

"RadioShack.com, stores and dealer locations across the country are still now open for business and serving customers", the company said in a news release.

"We will redeploy to other Sprint stores assets such as signage, displays and inventory now at RadioShack locations which are closing", Sprint said in its statement, adding existing Sprint employees will transfer to those stores. Numerous customers avoided their services and chose Amazon.com Inc. and Best Buy Co as they preferred stores for electronic purchases. Sprint had to consistently lower its prices in order to lure the customers and this made the marginal profits extremely less.

RadioShack says failed Sprint deal led to bankruptcy filing