The worst kept secret in retailing is no longer a secret. RadioShack has filed for Chapter 11 bankruptcy protection and plans to sell up to 2,400 stores as part of its reorganization plan.
General Wireless, a subsidiary of Standard General, RadioShack's largest shareholder has agreed to buy 1,500 of the 2,400 locations being put on the block. Sprint plans to open "store-within-a-store" operations in up to 1,750 of the locations. Sprint and General Wireless will open co-branded stores that will exclusively sell mobile devices from Sprint along with RadioShack products, services and accessories.
"We've proven that our products and new offers drive traffic to stores, and this agreement would allow Sprint to grow branded distribution quickly and cost-effectively in prime locations," said Sprint CEO Marcelo Claure, in a statement. "Sprint and RadioShack expect to benefit from operational efficiencies and by cross-marketing to each other's customers."
RadioShack currently has 4,000 company-owned stores in the U.S. and 1,000 dealer franchise locations in 25 countries operated by its Mexican subsidiary. The company's Asian operations are not part of the Chapter 11 filing.
Joe Magnacca, chief executive officer of RadioShack, said in a statement, "These steps are the culmination of a thorough process intended to drive maximum value for our stakeholders."
- RadioShack Reaches Asset Purchase Agreement with Affiliate of Standard General to Acqiure up to 2,400 Stores - RadioShack Corporation
- Sprint Signs Agreement with RadioShack's Lender to Expand Branded Stores - Sprint
- Fort Worth-based RadioShack powers down after comeback efforts fail - The Dallas Morning News
- Retailer to sell 2,400 stores - The Associated Press/Albany Times-Union