RadioShack Faces Bankruptcy... Again!

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RadioShack is in the red for the 2nd time in 2 years, as owner General Wireless Operations (GWO) files for Chapter 11 protection after the failure of a co-branding deal with US mobile carrier Sprint.

RadioShackGWO bought the RadioShack brand and its best stores in a series of bankruptcy auctions in 2015. It runs 1500 outlets, and plans to close 187 stores, either close or sell to Sprint another 364 stores and evaluate the remaining 1000 locations, with the option to liquidate.

The bankruptcy filing has CEO Dene Rogers claim a number of improvements and sales milestones during the short tenure of GWO. These include a 23% reduction in operating expensive and an 8% increase in gross profit dollars for 2016, the sale over over 1 million private-label headphones and 700000 Hulu login pins, a revamp of its e-commerce site and the integration of FedEx pick-up/drop-off points in 140 stores.

However sales of Sprint mobile subscriptions were unexpectedly weak, leading to GWO failing to raise new capital, cover liabilities or pay debt obligations.

“Over the course of the past two years, our talented, dedicated team has worked relentlessly in an effort to revitalize the company and the RadioShack brand, while providing outstanding service to our customers,” the filing reads. “We greatly appreciate their hard work and dedication.”

Will this bankruptcy truly bring about the end of the storied electronics specialist? Recent times saw the failure of smaller rival HHGregg and disappointing quarters for Best Buy, meaning brick-and-mortar retail remains in troubled waters.

Go RadioShack Bankruptcy Announcement