February 8, 2015 - UNITED STATES - On February 5, RadioShack filed for bankruptcy.
As part of its bankruptcy proceedings, the company is going to close a number of its stores, while others will survive as part of an agreement with Sprint to create a "store within a store."
In court documents posted by RadioShack, the company and its creditors detailed plans for which RadioShack stores will close and when.
In all, the company plans to close at least 1,784 stores by March 31, with the closures coming in three waves, or tranches.
The first tranche of closures includes 162 stores and is set to be complete by February 17.
The second tranche includes 986 stores set to be closed by February 28.
And the third tranche includes 636 stores slated to be closed by March 31.
There's some language in a court document here that says with notice by February 18, certain of the second tranche stores can have their closing date extended to the March 31 deadline.
But either way: 1,784 RadioShack's will be gone in less than two months. - Business Insider.
RadioShack Begins Wave of Liquidation SalesThis weekend will see the start of a final round of sales at 1,700 RadioShack stores, the first wave slated for liquidation as the consumer-electronics retailer tries to cut down its chain in Chapter 11 bankruptcy.
Judge Brendan Shannon authorized the beginning of store closure sales Friday, less than 24 hours after the Fort Worth, Texas, company sought bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Del.
RadioShack argued it couldn’t afford to lose a weekend of liquidation sales, especially with consumers geared up to find bargains and creditors anxious for cash.
With a fight over its bankruptcy financing brewing, RadioShack brokered a deal that will allow it to spend its cash over the weekend, as it launches a double-barreled restructuring strategy. While 2,100 stores have been marked for liquidation, RadioShack is attempting to sell off the remaining retail outlets, saving part of the business.
Judge Shannon granted interim authority for cash use, closing sales and other emergency measures at RadioShack’s bankruptcy court debut, but warned no final court orders will be signed until unsecured creditors have had their say over the company’s strategy. Bondholders owed $330 million, trade creditors owed $124 million, and landlords owed $30 million, for openers, will form ranks over the coming week to weigh in formally on RadioShack’s future.
RadioShack’s bankruptcy filing Thursday followed years of sliding sales and uncertainty about the fate of the aging chain, which pioneered selling technology to consumers but was overtaken by new industry players.
One of those players, wireless provider Sprint Corp. , could be the key to a salvage operation for some 1,750 RadioShack stores. An alliance agreement with Sprint, which is being put into final form, will be available to any buyer of RadioShack outlets that the wireless provider finds acceptable.
|Source: RadioShack Corp. Note: Five locations in Puerto Rico could not be mapped.|
RadioShack is expected to return to bankruptcy court for a debate over whether it needs to sign up for $285 million worth of Chapter 11 financing, under an arrangement that lender Cerberus Capital Management says is pricey and unnecessary.
Sprint has agreed to operate stores-within-stores for hedge fund Standard General, which is the proposed opening bidder at auction where RadioShack will invite competing offers. The deal isn’t exclusive, though, and Sprint can extend the alliance opportunity to any bidder.
“More than 10” potential bidders have signed up to review the data in confidence and will weigh whether to make a bid for RadioShack outlets, a company lawyer told the judge at Friday’s court hearing.
While falling sales and supplier worries restricted RadioShack’s liquidity, the company has enough money to implement its bankruptcy strategy, Cerberus said. When it filed for bankruptcy, RadioShack had $44 million in cash. Thanks to store closing sales, that figure is expected to rise so that by the end of February, RadioShack will have more than $118 million in cash in its coffers, according to Cerberus.
The proposed bankruptcy financing carries more than $6 million in fees, and gives RadioShack only about $13 million worth of new borrowing power, Cerberus said in court papers. Most of the loan is a refinancing of existing top-ranking debt, to lenders that include Standard General, the proposed buyer.
Cerberus is owed $100 million by RadioShack. Another lender, Salus Capital Partners LLC, is owed $150 million. Salus has agreed to go along with the bankruptcy financing, but Cerberus says the loan provides “no meaningful benefit” to RadioShack.
RadioShack is expected to defend its financing arrangements when the loan comes up for review. - WSJ.