Once the go-to store for radio amateurs, electronics tinkerers, and shortwave listeners, RadioShack has filed for Chapter 11 bankruptcy for the second time in 2 years, placing the future of its remaining stores in jeopardy. The 1743 retail outlets that survived RadioShack’s 2015 bankruptcy were acquired by General Wireless Inc, an affiliate of Standard General LP, which, at the time, received US Bankruptcy Court approval to acquire the inventory and assume the leases of the RadioShack stores. Now down to 1,500 stores, RadioShack once boasted more than 5,000 stores nationwide. At least some of RadioShack’s 5,900 employees could be affected. That figure is down from 7,500 workers 2 years ago.
“RadioShack.com, stores and dealer locations across the country are still currently open for business and serving customers,” the company said in a news release. “The Company is closing approximately 200 stores and evaluating options on the remaining 1,300. The Company and its advisors are currently exploring all available strategic alternatives to maximize value for creditors, including the possibility of keeping stores open on an ongoing basis.”
The acquisition by General Wireless followed a bankruptcy auction in 2015. Plans at the time called for “co-branding” about 1440 of the surviving stores with cellular phone provider Sprint Corp. RadioShack also has closed more stores and slashed operating expenses by more than 20%, but it wasn’t enough. CEO Dene Rogers cited weak mobile phone sales as a factor. Chapter 11 gives RadioShack another opportunity to restructure and stay in business. The retailer joins other brick-and-mortar stores forced to shutter outlets in the face of declining sales and fiscal losses, and electronics stores have been especially hard hit.
RadioShack once offered entry-level short-wave receivers, Citizens Band gear, a wide array of discrete components — including transistors, resistors, and capacitors — and, for a time, a fairly popular 2 meter hand-held transceiver and two different models of 10 meter single-band transceivers. RadioShack’s website is announcing a clearance sale with some items steeply discounted.
FOR IMMEDIATE RELEASE
GENERAL WIRELESS OPERATIONS INC. COMMENCES VOLUNTARY CHAPTER 11 PROCEEDING
RadioShack Website and Stores Currently Operating and Serving Customers; Selected Stores Will Close in the Coming Month
Company Looks to Preserve Jobs with Transition Agreement with Sprint Corporation
FORT WORTH, Texas, March 8, 2017- General Wireless Operations Inc. (“RadioShack” or “the Company”), doing business as RadioShack, the neighborhood electronics convenience store, today announced that the Company filed voluntary petitions under Chapter 11 in the United States Bankruptcy Court for the District of Delaware (“the Court”).
RadioShack.com, stores and dealer locations across the country are still currently open for business and serving customers. The Company is closing approximately 200 stores and evaluating options on the remaining 1,300. The Company and its advisors are currently exploring all available strategic alternatives to maximize value for creditors, including the possibility of keeping stores open on an ongoing basis.
“For nearly 100 years, RadioShack has proudly served local communities across the United States, offering consumers unique, high-quality products at a great value,” said Dene Rogers, RadioShack’s>President and Chief Executive Officer. “Over the course of the past two years, our talented, dedicated team has worked relentlessly in an effort to revitalize the Company and the RadioShack brand, while providing outstanding service to our customers. We greatly appreciate their hard work and dedication.”
He continued, “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. In 2016, we reduced operating expenses by 23%, while at the same time saw gross profit dollars increase 8%. Over the same time, we integrated FedEx pickup / drop-off into 140 RadioShack locations, delivered to customers over 700,000 Hulu login pins and sold more than a million RadioShack private brand headphones and speakers delivering high quality, value- based audio products to consumers across the country. 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. We will continue to work with our advisors and stakeholders to preserve as many jobs as possible while maximizing value for our creditors.”
Additional information for customers, vendors and other interested parties is available at www.radioshack.com. Court filings and claims information are available at a separate web site maintained by the Company’s claims agent, Prime Clerk, www.primeclerk.com or by calling 212-257-5450.
Pepper Hamilton LLP and Jones Day are serving as legal advisors to General Wireless.
RadioShack, the neighborhood electronics convenience store, is a leading national retailer of innovative personal and home technology products and services, and power supply needs. Founded in 1921, RadioShack is owned today by General Wireless Operations Inc., which acquired the storied brand in April 2015. The new RadioShack has over 1,500 company-owned stores, including 1,200 Sprint Stores at RadioShack, and 425 independent dealers located nationwide. Instagram: @radioshack | Twitter: @radioshack | Facebook: www.facebook.com/RadioShack.
Michael Freitag/ Trevor Gibbons / Tim Ragones Joele Frank, Wilkinson Brimmer Katcher 212-355-4449
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