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RadioShack Is Preparing to File For Bankruptcy Again (bloomberg.com) 176

Posted by BeauHD from the here-we-go-again dept.
BarbaraHudson writes: Bloomberg is reporting that the "new" RadioShack is preparing to file for bankruptcy. From the report: "General Wireless Operations, the RadioShack successor created by a partnership between Sprint Corp. and the defunct retailer's owners, is preparing to file for bankruptcy, according to people familiar with the matter. A filing could happen within the coming days and will probably result in liquidation, said the people, who asked not to be identified because the process isn't public. The beleaguered company, which does business as RadioShack, operates outlets that share space with Sprint's retail locations, as well as franchising the name to other stores." Investors had thrown $75 million in lines of credit and term loans at the business, which was used for "renovated locations and updated inventory." That's less than $60,000 per store -- chickenfeed in today's world, where renovating a McDonalds can run between $500,000 and $2,000,000, and you're not trying to pivot.
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RadioShack Is Preparing to File For Bankruptcy Again More

RadioShack Is Preparing to File For Bankruptcy Again

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  • Killed by the internet... (Score:1)

    by Anonymous Coward
    More than any other retail chain, Radio Shack was rendered obsolete and uncompetitive by the internet. It's kind of sad, because when I was a kid I used to like to go there.

    • Re:Killed by the internet... (Score:4, Insightful)

      by darkain ( 749283 ) on Tuesday March 07, 2017 @05:38PM (#53995525) Homepage

      More than any other? Perhaps you forget video rental stores. An entire industry is gone. RadioShack sticking around this long is actually quite noteworthy!

      • Re:Killed by the internet... (Score:4, Informative)

        by Anonymous Coward on Tuesday March 07, 2017 @05:59PM (#53995653)

        More than any other? Perhaps you forget video rental stores. An entire industry is gone. RadioShack sticking around this long is actually quite noteworthy!

        People tend to think that the video rental business disappeared just because Blockbuster is gone. But their demise was mostly due to bad business decisions. There's a video rental store a short distance for my house, and judging by their parking lot, I would say they are still doing quite well.

        Blockbuster was bought by Viacom. A few years later Viacom decided that they didn't want Blockbuster anymore so it was spun off as a separate company, a process that left it deeply in debt. Blockbuster was always profitable but couldn't generate enough money to pay down the debt so they filed for bankruptcy. The same thing happened to the Borders book stores (bought by K-Mart and then dumped). Massive debt cause by bad management has killed far more businesses than the Internet.

        • Re: (Score:2)

          by pnutjam ( 523990 )
          That's how these conglomerates like it. They gut companies and hide behind "market conditions", "unfriendly unions", "internet markets", "bad workers", "immigrants stealing jobs", "cheaper outsourcing", etc...

          American companies could do alot more for America if they weren't doing so much for the financial sector. We need to bring this sort of thing out of the shadows.

      • I don't think it was the internet that killed radio shack. The internet is nice and all, but what if you quickly need an electronics component and don't want to wait for it to ship? Having a local components store nearby is useful. Unfortunately, radio shack decided to really limit their stock of components and shift to being more of a consumer electronics store, thus becoming just another less interesting version of a best buy, circuit city, compusa, etc.

        Other big box stores picked up where radio shack lef

        • Re: (Score:2)

          by drewsup ( 990717 )

          well that and the fact they started wanting my fing post code when i bought batteries there, they drove themselves out of business.

      • RadioShack sticking around this long is actually quite noteworthy!

        It was also quite mysterious. I could never figure out how they did it. When I would walk past the Radio Shack in the mall, it was always empty, except for the two guys working there. Maybe a few times a week they would sell an overpriced battery. Yet despite paying salaries and high mall rents, for year after year they stayed in business. It made no sense.

        • Re: (Score:2)

          by adolf ( 21054 )

          As a kid, my first soldering irons came from Radio Shack, as did the parts for the projects I'd put together.

          And while I'm plenty damned old (get off my lawn!, etc), this was in the 90s.

          Later on as a quasi-professional-sort-of-guy, I'd regularly buy odds and ends from them out in the field. Need an SMA adapter? Radio Shack. An audio isolation transformer? Radio Shack had a fairly decent one. A bunch of 160 Ohm resistors? Done. A bipolar electrolytic capacitor of who-gives-a-shit value, a toggle switc

    • The problem is it didn't keep to its roots. With the maker movement it could had positioned itself a place for makers to quickly get parts, and also as a place to do 3D printing. As well to get replacement electronic parts. Where you can get parts faster than waiting for shipping. But for the most part they just focused on selling stuff you can get at other retail stores.

      • Comment removed based on user account deletion

      • Re: (Score:2)

        by Jayfar ( 630313 )

        The problem is it didn't keep to its roots. With the maker movement it could had positioned itself a place for makers to quickly get parts, and also as a place to do 3D printing. As well to get replacement electronic parts. Where you can get parts faster than waiting for shipping. But for the most part they just focused on selling stuff you can get at other retail stores.

        Maybe, but I doubt that model would have supported for than a couple stores in each city, certainly not all of the remaining 1700-some locations.

      • Yup, it used to be a hobbyist store. But, then they realized there was quick money to be made mainstreaming. That works until the fickle crowds find another shiny bauble.

        There's a term for this often failing business model that escapes me. But, it happens to niche TV channels a lot. They get excited when they see the ratings the one night they play "Die Hard" then decide to move that way full time. Then, their core audience abandons them. Then they find out they're swimming in large ocean filled with

    • It was dead before the internet. By a changing DIY hacker culture that made it possible for it to exist in the first place.

  • Again? (Score:2)

    by PPH ( 736903 )

    This must be double secret bankruptcy.

    • Not exactly. Good assets got spun off into a "new" company while the bad assets sank with the "old" company in bankruptcy court. Those good assets weren't enough to save the new company from being bankrupted. Someone will buy the Radio Shack IP and try again in the future.

  • Upsell Downside (Score:5, Insightful)

    by bill_mcgonigle ( 4333 ) * on Tuesday March 07, 2017 @05:05PM (#53995341) Homepage Journal

    Almost nobody will shop at RadioShack anymore because in the 90's they decided that annoying people at the cash registers to buy extra batteries and later to try to switch their cell phone plans was worth alienating the customer base, just as the Internet was coming along to offer people other options.

    Meanwhile, retailers like Walmart picked up most of their commonly useful inventory and made mint while not harassing customers with upsales. Apparently Walmart isn't driven by quarter-on-quarter-driven MBA's.

    On the other hand, they probably left with big bonuses and nobody knows who they were, and two bankruptcies later they're not black-balled.

    • Re:Upsell Downside (Score:5, Insightful)

      by BarbaraHudson ( 3785311 ) <barbara.jane.hudsonNO@SPAMicloud.com> on Tuesday March 07, 2017 @05:13PM (#53995379) Journal

      I hated the way they'd want your name and address, even though consumer protection legislation said that you don't have to give it to them. "But the system requires it." F*ck your system. I'm paying cash. So, put down "Johnny Cash." The address? Folsom State Prison.

      Too bad the Internet hasn't learned the lesson that when you try to data mine the customer, you alienate them.

      • Dammit, you mean I'm going to have to buy my own batteries now [staticflickr.com]?!!

        And GET OFF of my lawn!

      • Re: (Score:2)

        by rwyoder ( 759998 )

        I hated the way they'd want your name and address, even though consumer protection legislation said that you don't have to give it to them. "But the system requires it." F*ck your system. I'm paying cash. So, put down "Johnny Cash." The address? Folsom State Prison.

        And if they bother you again, just remind them of what went down in Reno. ;-)

      • Re: (Score:2)

        by rcase5 ( 3781471 )

        I worked for them for a few months in '89/'90. I HATED it! They treat their employees like crap! They expected us to sell but didn't really give us the latitude to make good sales, especially if we happened to work at a low-volume store. They would track to see if we got customers names and addresses, and if we didn't ask the question enough they would give us a hard time. I hated asking for that info because I felt like I was invading their privacy. It was also Russian roulette if, when we asked for the cu

      • Funny, I always just politely refused and they just rang my purchases up.

        • Funny, I always just politely refused and they just rang my purchases up.

          Probably because they had run into people like me who had pointed out that it's illegal too many times.

    • Amazon did it in. I don't know if anything could have saved it.

  • It's not over (Score:2, Funny)

    by mea2214 ( 935585 )
    Over? Did you say over? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!
  • Their bankruptcy filing should be thrown out by the judge. Its absurd that they can turn around a bankruptcy before the ink is dry on the first one.

  • Lol "RadioShack" (Score:3)

    by JustAnotherOldGuy ( 4145623 ) on Tuesday March 07, 2017 @05:17PM (#53995409) Journal

    "...The beleaguered company, which does business as RadioShack, operates outlets that share space with Sprint's retail locations"

    Let's be honest- today's RadioShack is little more that a Sprint store with a small shelf in back where you can buy 9-volt batteries and red-and-black colored wire for $8.99 a roll.

    • This is exactly why Radio shack is failing.
      It used to be an electronics enthusiast store which there is still probably a market for.
      There clueless management tried to turn it into a consumer electronics store.
      Who the hell would buy consumer electronics from Radio Shack?

      • That, and the 'electronics hobbyist' morphed from ham operators and tinkerers to 'computer enthusiasts'. Radio Shack didn't make that transition well at all.

        Add in mail order, and the computer revolution swept by them like a tsunami.

        Now, with the maker revolution well underway, no one buys at stores. Indeed, China Post delivers so much stuff, much of the business is direct to China.

        Inevitable. I don't even go the 12 miles to Fry's for simple stuff, Amazon Prime is worth it.

        • Re: (Score:3)

          by AK Marc ( 707885 )
          Radio Shack could have resisted the transition, by having Morse Code competitions, and family radio days, and other things. But instead, the one near me dropped components, and sold phones and RC cars. I think their component section consisted of extension cords, and things like that you could get anywhere else. They adapted, and adapted poorly.

          • Re: (Score:2)

            by irving47 ( 73147 )

            To be fair, they tried harder than that. They started selling arduinos and other microprocessor kits and the little sensors, shields, and accessories to accompany them. But when the package of 20 male-male jumper wires were going for $9.95 instead of $4 from Amazon prime or $1 from ebay (slowchinaboat), they were fighting a losing battle.

      • It used to be an electronics enthusiast store which there is still probably a market for.

        Back in the day when most electronics were fixable by the average person. I started taking electronic courses, saw the writing on the wall, and dropped electronics as a college major in the early 1990's. Best decision I ever made. Most of the electrical engineers I knew from back then are doing IT today. And they're pissed I'm making more money than they are because I got into IT ten years before they did.

      • Re: (Score:1)

        by Anonymous Coward

        This is exactly why Radio shack is failing.
        It used to be an electronics enthusiast store which there is still probably a market for.

        That's the problem. There is NO market for electronics enthusiasts any more. The majority of the population is now completely retarded and just wants to stare at a phone screen all day. The number of "electronics enthusiasts" is so small that its just not a sustainable business any more. Its sad and I wish it wasn't that way. But that's the world we live in now.

      • Radio Shack has been selling consumer electronics for a long, long time, over 50 years at least. And yes, people did buy stuff there. The hobbyist market is not large enough to keep them alive, just not enough people like that around. Amazon did it in. Amazon can run losses for 20 years because its a wall street darling, so its been undercutting everyone else. Antitrust behaviour, if you ask me.

  • ... is that RadioShack collapsed before Sears. My corporate dead pool for 2017 had Sears first, then RadioShack. I still can't find anyone who can explain why Sears is still open at all at this point, especially as they just sold off many of their best-known brands (including Craftsman, Kenmore, and Die-Hard).

    • Re:The only surprise here... (Score:5, Insightful)

      by avandesande ( 143899 ) on Tuesday March 07, 2017 @05:29PM (#53995475) Journal
      It takes an ocean liner a lot longer to sink than a dinghy.....

      • Re: (Score:2)

        by hey! ( 33014 )

        Like Sears. It used to be by far the dominant American retailer, a kind of combination of WalMart and Amazon with its extensive and paid-for retail and distribution network and pioneering mail order business. What killed them is complacency and lack of focus. Management had a money-making retail machine that was so large it couldn't really grow. Rather than focusing on running that cash cow efficiency, management let the retail cash cow fall apart as they tried to grow the company by moving into other t

        • Sears was the Amazon of the pre internet age
        • I remember going to sears(maybe the last time I went there?) to try to get a decent metal Christmas tree stand... no luck! Aisles of glowing inflatable santa type crap and not a single stand.

    • Sears is probably still in business because they *own* their real estate, mostly. No rent, easier to make the payroll.

      And they will get stuck with that previously desirable real estate as brick n mortar gives way to online sales.

      Retraction in retail should really pick up in 2017. All you fast food workers should jump on that and demand your $12 minimum wage, and accelerate the conversion to automated systems.

      • I thought retail was supposed to collapse in 2009 and have a much bigger impact than housing...but it never did from what I saw. I look every time I go out.

      • Re: (Score:2)

        by pnutjam ( 523990 )
        Sears spun off all it's real estate into some sort of real estate holding vehicle. It will be two years this July, which is probably when we'll start seeing liquidation or bankruptcy. Anything before the two year mark allows the courts to dissolve those arrangements and stockholders could claw back some value.

    • I used to love buying tools from the backroom order desk at Sears. You could order anything in the catalog, usually for a little off in-store price, and pickup a few days later...and what you paid for was what you ordered, which might or might not be what you got. Orders were packed by people who, quite literally, didn't know a drill bit from a drill press. And of course, if the error went the wrong way, you could always return the item.

      • I stopped going there when craftsmen stopped being made in USA. It was the only thing that differentiated their tools. I've switched to ELORA they are much nicer anyway.
        • Craftsman is a very confusing and ambiguous situation. A lot of their tools are now Chinese made, but not all of them. Of course the "evolv" brand is 100% Chinese, but amongst what is stamped Craftsman you have to examine the individual piece to know where it was made.

          From what I've seen, all the Craftsman power tools are now Chinese made. All the automotive tools (jacks, lifts, etc) are as well. Hand tools, however, are a mixed bag. You can come across the same ratchet twice and one will be Americ
    • Comment removed based on user account deletion

    • I still can't find anyone who can explain why Sears is still open at all at this point

      Ok, I'll explain it:

      as they just sold off many of their best-known brands (including Craftsman, Kenmore, and Die-Hard).

      Hmmm....wonder how they have the money to stay in business....

      • as they just sold off many of their best-known brands (including Craftsman, Kenmore, and Die-Hard).

        Hmmm....wonder how they have the money to stay in business....

        That brought in about enough money to keep the lights on a little bit longer. It doesn't bring in enough money to cover payroll for very long. Equally important, it just took away one of the biggest incentives they ever had for people to go to their stores. Why go to Sears when you can get Craftsman and Kenmore at Home Depot or Lowe's? Why go to Sears when tons of tire shops now sell Die-Hard batteries?

        Eddie Lampert is living out his Lord of the Flies fantasy with his employees right now, with disa

    • Re: (Score:2)

      by guises ( 2423402 )
      Sears is still doing good business in some locations. All of the stores that I know of in the US are doing poorly, but I know a few stores in Canada which are doing great. Meanwhile, there are Radioshacks in Canada but they're owned by a different company - the US-based Radioshack company does business in the US and Mexico and that's mostly it. They have very few other international stores.

    • Re: (Score:2)

      by pnutjam ( 523990 )
      If they enter Bankruptcy before July 2017, there are look back provisions that would negatively effect some of the stuff that was spun off (to enrich specific investors). I doubt they make it to the end of the year without liquidation.

  • Not good for those of us in rural areas (Score:3)

    by RubberDuckie ( 53329 ) on Tuesday March 07, 2017 @05:32PM (#53995495)

    I moved to a fairly rural area about four years ago. Before that, I don't think I'd been inside a Radio Shack in at least 10 years. Now that there are no large electronic stores locally, RS is the only place that I get get electronics. I've probably been there more in the last four years than the entire rest of my life. The selection isn't great, but it's better than nothing if I need something today.

    • Re: (Score:2)

      by dgatwood ( 11270 )

      My experience (as someone originally from a rural area) was that RS's selection wasn't significantly better than Walmart, and its prices were generally significantly higher.

    • For $40-$100 you can buy a complete inventory clone of a radio shack on ebay. Do it now and restock with individual items when you use something.
  • Radio Shack, of old, has long been missed. They were dust in the 90's for me. Forget all the up-selling batteries, phones, what's your ZIP? marketing annoyances... I mean the STUFF Radio Shack of the 70's and 80's had. By the 90's it was all gone, too much cell phone, and too much MADE IN CHINA crap that broke too easily.

    I just remember way back when. First place I saw a TRS-80. I still use an alarm clock I bought there in '79 I think. I even remember how COOL it was. Compact. Almost LED'ish, and a auto

  • Sad ending (Score:3)

    by p51d007 ( 656414 ) on Tuesday March 07, 2017 @07:33PM (#53996373)
    I remember what they were 45 years ago, when I was a teenager just getting my feet wet in electronics. You could walk into one, talk to the store clerks about what you were building and they would offer suggestion, different things about electronics. I went into one about a year ago, looking for a 100uf 25volt electrolytic capacitor, and the clerk had NO IDEA what I was asking for.
    • Try Fry's Electronics if you have access to one, you can still get this kind of service/interaction there - YMMV of course...

      • Re: (Score:2)

        by Megane ( 129182 )

        In Austin, there is a Radio Shack across the street from a Fry's. Yes, seriously. A few years ago when they closed a few stores (about two years before the bankruptcy), the two RS locations near where I lived were both closed, and that one was kept open.

        Now that I am moving back to San Antonio, I'm going to miss the 15-minute drive to Fry's. They were planning to open a store here right before they had bad financial troubles that made it hard enough for them just to stay in business. It's the largest city

  • Was out at the local strip mall today and had a sudden memory of how Radio Shack stores used to smell. They had a distinctive aroma, and no, it wasn't from the workers.

    Oh well.

  • There is a large maker community out there, that currently has to use mailorder for any small components. Being able to make a 20 minute trip is worth a huge markup on a 2.00 component, rather than having to wait 3 days for it to be delivered by mail. Personally, I haven't set foot into a Radio Shack store since I realized their selection of various components suck. Just like their electronics.

  • I told them this would happen when they stopped publishing their catalog.

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