RadioShack files for bankruptcy protection for second time in two years, and it’s closing 200 stores
The store has still struggled to compete with big retailers, wireless carriers and e-commerce sites. (March 9, 2017)
RadioShack has filed for Chapter 11 bankruptcy protection for the second time in just over two years, putting the future of the nearly 100-year-old electronics retailer in doubt.
Once known as the place to buy batteries and obscure electronic parts, RadioShack has struggled to hang on to customers as more people shop online.
It redesigned its stores about three years ago and stocked its shelves with popular headphone brands and the latest gadgets. But that didn’t attract more shoppers, and the retailer filed for bankruptcy protection in 2015.
After that, it tried to attract smartphone-loving shoppers by opening Sprint wireless carrier shops within 1,200 RadioShack locations. But that didn’t help, either. CEO Dene Rogers said Thursday that mobile phone sales were “surprisingly poor,†especially in recent months.
RadioShack said it is closing 200 stores and will evaluate its options for the remaining 1,300. Sprint Corp. said it will turn “several hundred†of the remaining locations into Sprint-only stores, but declined to give a specific number.
Sprint said it will allow all its own employees at the joint stores to transfer to another Sprint store. The company said RadioShack’s bankruptcy filing and the store closures “are not material†to Sprint’s overall sales results.
RadioShack, based in Fort Worth, has nearly 5,900 employees, according to bankruptcy paperwork filed on Wednesday. The company said it will try to “preserve as many jobs as possible.â€
Its stores are open for business, but RadioShack said that anything sold at them cannot be returned for a refund. Its website, however, will continue to accept returns on items bought from RadioShack.com. The company said that those holding a RadioShack gift card have until April 7 to spend it at stores.
RadioShack has faced an increasingly competitive market in its once-signature niche, as bigger retailers such as Wal-Mart Stores Inc. and Costco Wholesale Corp. and even wireless carriers began to sell similar items. The growth of e-commerce sites such as Amazon.com also bit into RadioShack’s sales, said Joseph Feldman, senior managing director at the Telsey Advisory Group.
“No consumer electronics store sells a differentiated product,†said Michael Pachter, research analyst at Wedbush Securities. “There’s nothing they sell that you need to go to their store to get.â€
RadioShack, which was founded in 1921, is owned by General Wireless Operations Inc., which bought the brand after its 2015 bankruptcy. New York-based hedge fund Standard General is a shareholder in General Wireless.
Times staff writer Samantha Masunaga contributed to this report.
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UPDATES:
1 p.m.: This article was updated with information about RadioShack jobs.
10:05 a.m.: This article was updated with comments from Sprint and analysts.
This article was originally published at 6:50 a.m.
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