Radio Shack may sell half its stores to Sprint, close the rest

The electronics retailer was founded in 1994

Once the store of do-it-yourself electronics innovators, Radio Shack is reportedly in talks with Sprint to whom it would sell half of its retail locations and then close the rest.

If the deal goes through, or if Radio Shack cannot find another buyer, it may spell the end of one of the oldest electronics retailers. One scenario has Sprint rebranding the retail locations with its name; the rest of Radio Shack's stores would then close.

Founded 94 years ago, Radio Shack last September warned shareholders that if talks with lenders over restructuring failed, it faced bankruptcy.

The consumer electronics icon, which sells everything from radio-controlled toy trucks to transistors, faces delisting on the New York Stock Exchange after it failed to file a business plan to address non-compliance with Exchange rules. In this case, Radio Shack needed to achieve an average market value of at least $50 million for 30 straight days or come up with shareholder equity in that same amount.

According to Bloomberg, which cited two anonymous sources, Sprint and RadioShack may also decide to co-brand stores.

Sprint declined to comment.

Radio Shack also declined to comment on the news and said it has not confirmed any of the information that is being reported by Bloomberg.

According to Bloomberg, Sprint is considering buying from 1,300 to 2,000 locations.

Radio Shack has its headquarters in Fort Worth, Texas and has more than 4,000 retail locations around the world and 27,500 employees. The company has hired four CEOs over the past three years in an attempt to turn its failing business around.

Even so, RadioShack has seen about 90% of its shareholder value evaporate over the past year. After the NYSE news on Monday, shares fell an additional 13%.

Among Radio Shack's problems, according to industry analysts, is that its stores are outdated, it didn't transition well to the era of smartphones -- a highly saturated market -- and its online business hasn't performed well, either.

​"What can we say -- it is a dog-eat-dog world out there," Leslie Hand, an IDC retail analyst, said in an email reply to <i>Computerworld</i>. "Competition is fierce, but Radio Shack keeps being reincarnated, so perhaps they will be operated at Sprint stores in all of the right locations in the near future. I saw another unsubstantiated rumor that Amazon is interested -- also an interesting proposition, but I am unconvinced as to its value."

Copyright © 2015 IDG Communications, Inc.

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