Bloomberg News is reporting RadioShack is in talks for a bankruptcy deal that would result in closing half its stores and selling the rest to Sprint.
RadioShack has been circling the drain for what seems like an eternity. But the saga could get even sadder if a new report about a store sell-off to Sprint is true.
RadioShack is reportedly pursuing a bankruptcy deal under which it would close half of its more than 4,000 stores and sell the rest of its leases to Sprint, killing the RadioShack brand name, Bloomberg News reported today. The two chains have discussed co-branding the stores into some kind of Sprint-RadioShack entity, Bloomberg reported, citing two anonymous people familiar with the discussions.
RadioShack’s continued survival has been something of a running joke in the business world for the past decade, despite creative stabs at turnaround and a revolving door of CEOs. The Onion, way back in 2007, wrote an article titled “Even CEO Can’t Figure Out How RadioShack Still in Business.” Amazon, Best Buy, and Wal-Mart have only grown since then, beating RadioShack in assortment, price, and convenience.
Mass store closures at the company would be a disaster for potentially tens of thousands of retail workers. The chain said in its most recent annual filing that it employed about 27,500 people as of Dec. 31, 2013, though it has conducted some layoffs since then. On Jan. 22, RadioShack said it received a notice from the New York Stock Exchange saying it would be delisted from the market due to its low valuation, which had slumped to below $50 million. The company, whose shares were down by about 13% on Monday afternoon, currently has a market cap of just $28 million.
RadioShack declined to comment for this article.
Beyond the heavy job losses, the notion of RadioShack stores evolving into Sprint locations is somewhat heartbreaking, akin to watching a a sad, struggling caterpillar metamorphose into an equally sad, struggling butterfly. Sprint, the third largest U.S. mobile operator, recently reported that it lost subscribers for an 11th straight quarter, and would cut 2,000 jobs. Verizon, AT&T, and T-Mobile all continue to gain customers.
The chairman of Sprint, Masayoshi Son, has reportedly been seeking to fix what he refers to as a “loser” mentality at the Overland Park, Kansas–based company.