Who predicted this for the last three years? I’ll also be right about JC Penney and Sears. It’s just a matter of time. The retail scrap heap of history adds another retailer.
RadioShack Prepares Bankruptcy Filing
Struggling Electronics Chain, in Talks with Lenders, Could File as Soon as Next Month
By Matt Jarzemsky, Mike Spector and Drew FitzGerald
Updated Jan. 14, 2015 7:14 p.m. ET
RadioShack Corp. is preparing to file for bankruptcy protection as early as next month, people familiar with the matter said, following a sputtering turnaround effort that left the electronics chain short on cash.
A filing could come in the first week of February, one of the people said. The Fort Worth, Texas, company has reached out to potential lenders who could help fund its operations during the process, another person said.
Meanwhile, RadioShack is in talks with a private-equity firm that could buy its assets out of bankruptcy, the people said. They cautioned that the talks with the private-equity firm may not produce a deal and that the company may try instead for a more typical reduction of debt and restructuring of its operations in bankruptcy court.
Situations when companies are close to a bankruptcy filing can be fluid and even contentious, and plans can change at the last minute.
The retailer has made clear it is running dangerously low on cash after posting losses in each of the last 11 quarters, and its stock-market value has shriveled to less than $50 million. In December, it warned in a securities filing that it could be forced into bankruptcy court if it couldn’t raise new funds or get relief from lenders that have blocked its efforts to close hundreds of stores.
The company said in the filing that it had $62.6 million on hand as of Nov. 1—$43.3 million in cash and $19.3 million in borrowing availability—a thin cushion for a sprawling chain with about 4,300 company-operated stores in North America.
The 94-year-old chain that started in the 1920s with a store in Boston traced the rise of electronics in the life of Americans—from transistor radios and typewriters to Bluetooth headphones and smartphones. It grew into a nationwide icon but began spiraling toward irrelevance as electronics moved to the Web and technology moved on.
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