RadioShack Files for Bankruptcy, Sprint to Take Over 1,700 Stores
Gadget retailer RadioShack filed for Chapter 11 bankruptcy protection today, and reported that its largest shareholder (and one of its largest debtors) Standard General LP will buy 1,500 to 2,400 of RadioShack’s 4,000 US stores. The company listed liabilities of $1.39 billion and assets of $1.2 billion in its bankruptcy petition in a Delaware court.
So what’s going to happen to the stores?
Well, there’s no mention of Amazon (yet), but Sprint has already said they will be setting up Sprint stores in some 1,750 RadioShack locations.
According to Sprint’s press release, Sprint is going for a "store within a store" concept. They will occupy about a third of the retail space of each location, where Sprint employees will sell mobile devices and service plans. The stores will be co-branded with Sprint being the primary brand on storefronts and in marketing materials. Sprint currently has around 1,200 company-owned retail stores, and if this deal goes through then that number will more than double.
"We’ve proven that our products and new offers drive traffic to stores, and this agreement would allow Sprint to grow branded distribution quickly and cost-effectively in prime locations," said Sprint CEO Marcelo Claure. "Sprint and RadioShack expect to benefit from operational efficiencies and by cross-marketing to each other’s customers."
So the long and the short of it is, some RadioShack stores will stay open, Sprint will take over some of the real estate in those stores, and Amazon is no where to be found.
Darn. I was looking forward to confirming the rumor that Amazon was going to start a chain of unstores. This would have been a good opportunity for Amazon, and they already had a concept which could fit in RadioShack’s limited space.
The unstore Amazon opened at Purdue University this week had a footprint of about 2,300 square feet. That’s not too much larger than the average RS store, which can run anywhere from 1,200 to 2,000 square feet in size.
So do you think the rumor was bogus, or did Amazon back out?
I think Amazon considered the opportunity and sensibly decided they needed to test the Purdue unstore before they committed to a bunch of expensive real estate leases.
After all, we still don’t know that Amazon’s concept of a customer service desk combined with a pickup/dropoff location will work out. It could fail, or it might need to be tweaked, or it could take off.
It’s too early to say.
image by Nicholas Eckhart