RadioShack, after years of puzzling bottom-seeking stock investors on how it managed to stay in business, filed for bankruptcy on Thursday evening. The retailer, best known to consumers in recent years as a trusty seller of easy to lose cords, chargers and tech accessories, also announced a deal to sell between 1,500 and 2,400 stores to a consortium including Standard General and Sprint while in restructuring. The bankruptcy filing ends a surprisingly long run for RadioShack. While some electronics competitors such as Circuit City and Nobody Beats The Wiz died years ago, the Ft. Worth, Tx.-based company withstood the internet age, the rise of Apple AAPL +0.32% and consumers’ transition to wireless devices mostly by selling cords, esoteric technological parts, battery packs and adapters.
Founded 94 years ago in Texas as a leather shoe parts and repair store, the company rose to glory with the mass adoption of the radio in the 1920s and 1930s after opening its first RadioShack store in Boston in 1921. In 1935, in the midst of the Great Depression, RadioShack’s predecessor entity was listed on the New York Stock Exchange and in 2000, the company changed its ticker to ‘RSH’.
The retailer sold its first mobile phone in 1984 and eventually peddled over 73 million cellular phones over a span of decades. The company also became a top seller of the walkmen, CD Players, mini disk players and beepers that preceded, but were made obsolete by the smartphone, in addition to do-it-yourself devices such as satellites. As with Best Buy BBY -0.33% and Circuit City, RadioShack suffered from the rise of e-commerce, but it survived as a declining and niche electronics business for years.
Ultimately, changing technology and consumer habits proved too much to overcome. The company filed with $1.2 billion in assets and $1.38 billion in liabilities in a Delaware court Thursday, listing between 50,000 and 100,000 creditors. Wilmington Trust Company, owned my M&T Bank, is listed as RadioShack’s largest unsecured creditor with a $329 million claim, while Sprint holds a $6 million claim. There will be life, of sorts, after bankruptcy. Standard General, a private equity fund said on Thursday it reached a deal to acquire up to 2,400 RadioShack stores and will work with Sprint to create 1,750 store-within-a store concepts nationwide. Standard General also filed a motion to close RadioShack’s remaining company-owned stores under an agreement with Hilco Merchant Resources. Currently, RadioShack currently has approximately 4,000 company owned stores in the U.S., and over 1,000 dealer franchise stores in 25 countries. RadioShack stores operated by its Mexican subsidiary, and its Asia operations are not a part of the company’s Chapter 11 filing. More