Thursday, February 5, 2015

Radio Shack Goes Into Bankruptcy With a Plan

The story floating around about Radio Shack’s bankruptcy plans didn’t quite make sense. What would Sprint want with another 1,000 stores? And why would Radio Shack shut down completely? The latest word, that Sprint will occupy only about a third of each store, with Radio Shack merchandise in the rest of the store, makes more sense.

Radio Shack filed for bankruptcy late today, and while all the details have not been worked out yet, it looks like one third to one half of Radio Shack stores will stay open. Most of the rest could close, though there are a few caveats. Radio Shack’s franchise locations, almost 1,000 of them, are not part of the bankruptcy and will stay open.

There continue to be reports that Amazon could end up with a few hundred of Radio Shack’s stores. There are several ways that could happen, and Amazon is probably still working on its plans.

The commentators who were ready to pound nails in Radio Shack’s coffin were not too far off. Radio Shack is obviously overextended, and it may end up with barely a third of the footprint it had a couple of years ago.