When RadioShack filed for bankruptcy earlier this year, it looked to some like it was well and truly over for the 94-year-old consumer electronics retail business.
However, a deal green-lighted by a Delaware bankruptcy court Tuesday shows there’s life in the ol’ company yet, albeit in a transformed state.
The deal, which involves the sale of 1,740 RadioShack stores to the Standard General hedge fund, will see the outlets co-brand with Sprint stores. The telecoms firm is expected to occupy around 30 percent of the space in each location, where it’ll sell mobile devices and wireless plans.
RadioShack, which was desperate to secure the deal by Wednesday to save it paying another round of rent on its stores, was running 4,000 retail locations up until its bankruptcy filing in February. Although the retailer’s troubles have led to the closure of more than half of its stores, moving in with Sprint means around 7,500 RadioShack jobs will be saved out of a total of 27,000.
Tuesday’s ruling by Judge Brendan Shannon followed four days of court hearings which saw Salus Capital Partners, RadioShack’s biggest lender, go up against RadioShack and Standard General with a competing offer.
After listening to arguments from both sides, Judge Shannon agreed RadioShack could go to Standard General, describing its bid as “economically superior,” and adding that it’d lead to the “terribly important benefit of saving more than 7,000 jobs and saving a century-old American retail icon.”
As for Sprint, the deal will nearly treble its number of retail outlets across the U.S. and also get its name on the front of its new stores. RadioShack branding, on the other hand, will be limited mainly to interior signage.
Tuesday’s court ruling means the one-time go-to store for tinkerers and hobbyists lives to see another day, though its success from hereon in will depend on how it reshapes its retail business to attract new customers and how it fares in its in-store partnership with Sprint.
[Source: Reuters]
