RadioShack, the nationwide electronics retail franchise in operation for the past 94 years, has filed for Chapter 11 bankruptcy Thursday (Feb. 5). Last fall, a New York-based hedge fund stepped in and give RadioShack the financial boost it needed, but the company’s debt was apparently far too staggering to restructure.
RadioShack, which operated over 4,000 stores nationwide, had been struggling for years to stay afloat. The Chapter 11 bankruptcy protection was filed Thursday and will be court-supervised. The chain plans to sell up to 2,400 stores to the Standard General hedge fund group. Standard General is the chain’s largest shareholder, and the chain has filed a motion to close the remaining stores after the sale.
According to the Associated Press, wireless carrier Sprint Corp. is working alongside Standard General to open small pop-up booths in the stores the hedge fund is buying. These Sprint kiosks would operated in just a small portion of the RadioShack stores that will remain open.
By way of a press release from RadioShack, the chain owns over 1,000 dealer franchise stores in 25 countries. The stores operated by its Mexican subsidiary and all operations in Asia will not be part of the Chapter 11 filing. There are other upcoming discussions to sell the company’s remaining assets.
“These steps are the culmination of a thorough process intended to drive maximum value for our stakeholders,” said RadioShack CEO Joe Magnacca in a press statement.