By Barry Eitel
SAN FRANCISCO
RadioShack filed papers Thursday to reorganize under Chapter 11 bankruptcy.
The technology retailer, founded in 1921 and a shopping mall staple by the end of the 20th century, reached a deal with hedge fund Standard General to sell off as many as 2,400 of its current brick-and-mortar stores.
The company’s fall is the latest in a lengthy series of retail chains, including Borders bookstores and Circuit City, unable to compete in the era of smartphones and online shopping.
RadioShack operated approximately 4,000 stores around the United States.
Standard General, which rescued RadioShack from bankruptcy last year, will obtain between 1,500 and 2,400 RadioShack stores. As rumored earlier this week, wireless carrier Sprint could partner with the hedge fund to operate as many as 1,750 of those stores.
These stores could use a “store within a store” model, allowing the RadioShack brand to still exist. Underperforming locations, though, will be closed.
RadioShack also has more than 1,000 franchise stores in 25 countries, a subsidiary company in Mexico and operations in Asia. The company noted that these stores are not part of Thursday’s announcements.
“These steps are the culmination of a thorough process intended to drive maximum value for our stakeholders,” Joe Magnacca, RadioShack's CEO, said in a release.
The filing claimed the company reported assets of $1.2 billion and debts of $1.39 billion as of November 2014.
RadioShack pioneered technology such as the personal computer in the late 1970’s and became a popular retailer for devices like walkie-talkies and cassette recorders.
By the turn of the millennium, however, the company found itself ill-prepared for the rise of digital music players and, later, the smartphone.
Although RadioShack stock had been trading above $20 as recently as 2010, prices dipped below a $1 per share in June 2014.
By Thursday, shares were trading at 10 cents each.
