RadioShack’s new owner filed for bankruptcy late Wednesday, just two years after the chain endured a major restructuring, saying it will close about 200 stores and explore options for the remaining 1,300.
General Wireless Operations has operated the Fort Worth-based consumer electronics chain as a slimmed-down private company since it was purchased out of bankruptcy in 2015 by the Standard General hedge fund. The new company was run in partnership with Sprint, which set up displays inside RadioShack stores to sell wireless products and services. The Chapter 11 filing was made in U.S. Bankruptcy Court in Delaware.
In a statement, RadioShack said it would explore all available strategic alternatives to maximize value for creditors, including keeping stores open on an ongoing basis.
“Since emerging from bankruptcy two years ago as a privately owned company, our team has made progress in stabilizing operations and achieving profitability in the retail business, while our partner Sprint managed the mobility business,” said Dene Rogers, RadioShack’s president and chief executive officer.. “However, for a number of reasons, most notably the surprisingly poor performance of mobility sales, especially over recent months, we have concluded that the Chapter 11 process represents the best path forward for the Company.”
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Separately, Sprint said it has reached a deal to convert several hundred RadioShack stores into Sprint stores. In recent days, Sprint displays had been removed from some stores and RadioShack launched sales at all of its stores.
“RadioShack’s bankruptcy filing and subsequent store closings are not material to Sprint’s overall sales results,” said Kevin Crull, President of Omnichannel Sales for Sprint, in a memo posted online.
RadioShack, a Fort Worth fixture since it was acquired by Charles Tandy’s Tandy Corp. in 1963, entered bankruptcy in 2015 after three years of heavy losses. The company closed about half of its 4,000 stores and sold 1,700 to General Wireless, which co-branded 1,400 locations with Sprint.
When the venture was rolled out in July 2015, Chief Executive Officer Ron Garriques said he had “ambitious plans for the new RadioShack.” The business renovated locations and updated inventory. The Sprint partnership also was meant to give the stores an edge.
But the company continues to face stiff competition from online retailers, wireless providers and other electronics chains. Garriques stayed less than a year and was replaced by Rogers, a former Target and Sears executive, last April.
For years, RadioShack was a leading electronics retailer and manufacturer, which made a name for itself with stereo speakers, CB radios and the first mass-marketed personal computer, the TRS-80. But other computer makers quickly passed it by and ultimately the retailer faced heavy competition from big-box competitors and online sellers.
Tandy changed its name to RadioShack in 2000, and the company was a longtime Fort Worth benefactor. But cutbacks over the past decade caused the company to withdraw from community affairs, and its former riverfront headquarters is now largely occupied by Tarrant County College.