RadioShack possibly striking bankruptcy deal with Sprint
According to Bloomberg sources, the floundering retailer may be filing bankruptcy and will be taken over by Sprint.
A sign for a RadioShack store is seen in the Brighton Beach section of the Brooklyn borough in New York . The electronics retailer has said it may need to file for bankruptcy protection if its cash situation worsens, after reporting its tenth straight quarterly loss.
Shannon Stapleton/Reuters/File
Troubled electronics retailer RadioShack Corp is preparing to shut down the chain in a bankruptcy deal that would see half the stores taken over by Sprint, Bloomberg News reported, citing people with knowledge of the discussions.
The rest of the stores would close down, Bloomberg said.
Sprint and RadioShack have also had talks about co-branding the stores, Bloomberg reports, citing two anonymous sources.
Another bidder could yet emerge to buy RadioShack and continue operating the 94-year-old chain, Bloomberg says.
The Wall Street Journal reported on Sunday that Standard General, a hedge fund and the largest investor in RadioShack, was in talks to serve as the lead bidder at a bankruptcy auction.
RadioShack declined to comment on the Bloomberg report and said it had not confirmed any of the information.
Sprint declined to comment.
The electronics retailer was once the operator of go-to shops for innovators and engineers for products ranging from vacuum tube speakers to the first mass-produced PC. But the company has failed to transform itself into a destination for mobile phone buyers, losing out to rivals such Amazon.com and Wal-Mart Stores.
RadioShack said in October that it would seek to convert a loan of $120 million, given by investors including Standard General and Litespeed Management LLC, into equity "in the coming months".
RadioShack shares were down 15.2 percent at $0.24.
As CNN reports, RadioShack saw its stock decline 70 percent by December of 2014.
Things looked on the upside last year after Salus Capital agreed to loan RadioShack $250 million, but the relationship soured when Salus did not agree with the retailer’s turnaround plan. Salus called the loan less than a year after it was formalized.