The troubled electronics retailer is reportedly in talks to sell half its stores to Sprint, while shuttering its remaining locations.
Troubled electronics retailer RadioShack is reportedly close to filing for bankruptcy and is in talks to sell half of its more than 4,000 stores to Sprint while shuttering its remaining locations.
That’s according to Bloomberg, which cites anonymous sources in reporting that the Fort Worth, Texas-based retailer is close to a deal that would see the RadioShack RSH -13.32% locations sold to Sprint S -0.70% operated under the wireless carrier’s name. Under those terms, the deal would represent the end of RadioShack’s existence as a stand-alone retailer once the rest of its locations are closed. The deal is not yet finalized and could still fall apart, or the two companies could agree on a co-branding arrangement, Bloomberg’s report noted.
Also, the New York Stock Exchange said late Monday that it would delist Radio Shack’s shares. The company has fallen below the required threshold of a $50 million market capitalization or an equal amount of shareholder equity for 30 consecutive trading days. The exchange said that Radio Shack does not intend to submit a business plan to address the problem.
See video from Fortune on the future of Radio Shack (click below)
In January, The Wall Street Journal reported that the 94-year-old RadioShack was preparing to file for Chapter 11 bankruptcy protection by February after reporting losses in each of the last 11 quarters. The chain reported worse-than-expected losses in September and required help from hedge fund Standard General, which led a financing that helped RadioShack continue operating through the holiday season.
Now, The Journal reports that Standard General, which became RadioShack’s biggest shareholder last year, is in talks to be the lead bidder in the troubled chain’s potential bankruptcy auction. The Journal cites anonymous sources in reporting that Standard General could become the so-called stalking horse, or the first bidder, in a court-supervised auction of RadioShack’s assets. The hedge fund could also potentially purchase a slimmed-down RadioShack that has fewer stores, the paper said.
RadioShack’s stock fell during Monday’s trading sessionand is down nearly 90% in the past year.