RadioShack May Close Half of its Retail Locations, Sell Other Half to Sprint [Updated]

[MacRumors]

The end may be near for RadioShack retail stores after a dire September warning that the company would not be able to finance operations "beyond the very near term" without a sale, investment, or company restructuring. According to Bloomberg, RadioShack may be planning to sell half of its stores to Sprint and close the other half in a move that would potentially see the termination of the RadioShack brand.

The locations sold to Sprint would operate under the wireless carrier's name, meaning RadioShack would cease to exist as a stand-alone retailer, said the people, who declined to be identified because the talks aren't public.

RadioShack was established in 1921 and flourished for many years, but in the early 2000s, the retail chain began seeing some decline in sales. In 2006, RadioShack closed 500 stores and laid off more than 400 employees in an effort to cut costs, but the brand has continued to struggle since that time as consumers have turned towards online retailers like Amazon and dedicated carrier stores from AT&T, Sprint, T-Mobile, Verizon, and more.

The company warned investors in September that it could be forced to file for bankruptcy protection, but RadioShack bankruptcy rumors have circulated since 2012, when RadioShack first began seeing major losses. A second consolidation was announced in 2013, with an additional 1,100 stores to be closed, but that move has since morphed into the liquidation plan to sell to Sprint or another company as RadioShack has continued to lose value over the course of the past year.

Terms are still being discussed between RadioShack and Sprint and Bloomberg warns that negotiations could break down or that plans could change. The two companies have discussed co-branding, and it's still early enough in negotiations that another bidder could purchase RadioShack and keep the retail chain operational.

Update Feb 3 4:34 AM PT: Bloomberg also reports that Amazon is in talks to acquire some RadioShack locations to boost its brick-and-mortar retail presence in the United States. RadioShack has over 4,000 U.S. locations. The discussions are reportedly ongoing and a deal may not be reached.

Update Feb 5 2:21 PM PT: RadioShack officially filed for Chapter 11 bankruptcy on Thursday, February 5, and announced plans for a deal with Sprint. An asset Purchase agreement with Standard General (RadioShack's largest shareholder) and Sprint will allow the RadioShack name to live on via a "store-in-store" model in some of the 2,400 shops (out of 4,000) it plans to sell. The remaining underperforming stores will be closed.


Article Link: RadioShack May Close Half of its Retail Locations, Sell Other Half to Sprint [Updated]

 

[illegalprelude]

More than anything else, heart always goes out to the employees who are affected by these huge closures.

 

[maflynn]

Sad to see them go, my very first computer was a TRS color computer with 4k of ram, way back in the day

 

[KPOM]

Not a big surprise. Once they got squeezed by the big box stores and then by online resellers they redoubled their efforts on wireless, but couldn't compete with the carrier-owned stores. The stores are the right physical size, though, so it makes sense for a carrier to buy them. Sprint must be planning an expansion.

 

[extricated]

Sorry to hear that.
I hardly ever go into a Radio Shack, but when I do, it's for something that I can't find anywhere else. I guess online ordering will bridge that gap now.

 

[tod]

They're still in business?

 

[KPOM]

Sad to see them go, my very first computer was a TRS color computer with 4k of ram, way back in the day

Tandy 1000 EX which we later expanded to the full 640K. We even got an external floppy drive for it.

 

[extricated]

... Sprint must be planning an expansion.

T-Mobile merger would be cool with me.

 

[KPOM]

They're still in business?

Not for much longer.

 

[steve knight]

just saw one in the mall with a 25 to 50% off sale only the junk stuff for sale.

 

[BruiserB]

Is anyone else kind of confused by the article? Is Sprint proposing to run a general electronics store under the Sprint name? Or are they just buying the real-estate and changing the stores to Sprint mobile stores?

 

[KPOM]

Is anyone else kind of confused by the article? Is Sprint proposing to run a general electronics store under the Sprint name? Or are they just buying the real-estate and changing the stores to Sprint mobile stores?

This suggests it could be some sort of jointly branded operation

http://finance.yahoo.com/news/sprint-over-half-radioshack-stores-190822970.html

My guess is it would be a Sprint store "on steroids" with perhaps a slightly expanded product set compared to a regular wireless carrier store but not the full complement of whatever it is RadioShack sells now (i.e. Sprint radio controlled cars or AA batteries).

 

[sracer]

Sad to see them go, my very first computer was a TRS color computer with 4k of ram, way back in the day

My first computer (early in 1978) was a TRS-80 Model I, 4K RAM, Level I BASIC... which I upgraded to Level II.

I relied heavily on Radio Shack for audio/video cables and connectors. But in recent years, the local RS dramatically reduced the variety they kept in stock, eliminating the last reason to regularly frequent them.

 

[76ShovelHead]

I hope my local RS is bought out by Sprint, I'm a customer and would like to not have to drive 20 miles to the "big" city, especially since all the stores in the city are privately contracted sprint retail stores and not actually corporate stores.

 

[lolkthxbai]

I'm just waiting until I can get a ton of switches, resistors and leds for cheap! Bring on the fire sale!

 

[Rodster]

I'll always have a soft spot for Radio Shack. Many memories for sure. They always seemed to have any weird electronic components, connectors i've ever needed. They happened to be the only vendor who had books to help me pass my grueling computer exams with NCR Corp back in the early 80's.

I fondly remember their "Incredible Universe Superstores" and their Grid systems PC's which were known for their durability.

 

[SeattleMoose]

Inevitable

Way back in the day RS is where I went to buy electrical components (resistors, capacitors, circuit testers, soldering guns, etc.). I would breadboard circuits with jumpers and alligator clips with RS parts. Serving the electronics and radio (HAM, CB, etc.) market was their bread and butter. Unfortunately, over time the whole "home geek" electronics and radio markets gave way/evolved into a "personal electronics" market. As revenue dried up they tried to stay relevant by having more "consumer electronics" available. In doing so, they lost their identify. The net result was a very small store (i.e. limited selection) competing with the likes of Best Buy, Circuit City, Fry's, and Microcenter. R.I.P. Radio Shack...you served us geeks well, but the writing was on the wall for almost two decades.

 

[SockRolid]

RadioShack was established in 1921 and flourished for many years, but in the early 2000s, the retail chain began seeing some decline in sales.

Radio Shack used to sell electronic components to hardware hobbyists.
The hardware hobbyist market dried up as geeky kids started programming instead.
So Radio Shack tried to move upmarket and sell higher-margin electronics items.
But by then Amazon was already crushing brick-and-mortar as well as online retailers.

Times change.

 

[N2bnfunn]

I agree about the employee's but RADIO Sharks have sucked FOR YEARS.. You go in there the employee KNOW NOTHING ABOUT ANYTING it is sad when you have to tell and show them what you want.

 

[Zellio]

RadioShack has been dead since the 90s when the stopped having hard to get parts and their goods were priced far higher then other local stores.

 

[Ragnar51]

Very Sad Indeed

They, along with Lafayette Electronics stores were the go to places for CB's and for decent stereo equipment in the 60's-70's. I still have, cherish, and frequently use my RS stereo system. At over 40 years old it still plays and sounds great!.

 

[dwsolberg]

Their business model died long ago. I'm surprised they lasted this long.

 

[BCWorld]

This just in: "RadioShack may close half of its retail locations, and THEN, SELL OTHER HALF TO SPRINT!??!!" Really??? May as well close down. #

 

[teslo]

More than anything else, heart always goes out to the employees who are affected by these huge closures.

you're right generally speaking, but if you didn't get out of the 'shack until now, you weren't paying attention... for some 15 years :/

 

[carrrrrlos]

Daddy what’s a radio?