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Radio Shack Files for Bankruptcy (Again), Blames Sprint

General Wireless, the successor company to RadioShack Corporation, filed for bankruptcy protection in Delaware on Wednesday -- and immediately turned around and blamed Sprint for it. When we last checked in on the RadioShack brand, it had won a last minute reprieve from a US bankruptcy court to remain in business and will live on, operating around 1,500 stores (down from its original total of 4,000 stores) cooperatively with Sprint. Ideally, this partnership was supposed to allow Sprint to immediately double its retail presence by using about a third of each store's retail space to sell plans and phones.

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But alas, things apparently didn't work out as either party planned.

General Wireless (Radio Shack) filed for bankruptcy on Wednesday for the second time in a little over two years.

"The core RadioShack retail business (i.e. excluding the Sprint mobility business) had turned a corner and become profitable," General Wireless said in its filing. But the company was also quick to point out that Sprint's general overall failures in the wireless market contributed to the duo's plan not going as expected.

"While the retail business progressed, the Sprint relationship did not yield the benefits" that they had expected, General Wireless said. Under the original plan, Sprint was supposed to share sales after achieving $60 million in revenues from the shared spaces. That didn't happen, ultimately putting the business behind on its $4 million in monthly rent payments. According to the filing, General Wireless was owed roughly $10.2 million in unpaid rent.

Granted Sprint was only part of the problem. The company has long suffered from a failure to adapt to the modern era (read: Amazon, online retailers) and a poor customer service and satisfaction rating rivaled only by the nation's biggest cable companies. According to the Temkin Experience Ratings, RadioShack has been listed as the retailer with the "worst overall customer experience" for six consecutive years.

Under this new bankruptcy plan 200 stores will close as they figure out what to do with the remaining 1300. In a statement Sprint said the company intended to work on converting many of the locations into full, more traditional Sprint retail locations.

Most recommended from 70 comments


mlcarson
join:2001-09-20
Santa Maria, CA

41 recommendations

mlcarson

Member

Not your old Radio Shack

I think at this point it doesn't really matter if Radio Shack goes away for good. All they want to be is a resale outlet for cellular phones and radio controlled toys rather than a unique parts store.
microphone
Premium Member
join:2009-04-29
Parkville, MD

12 recommendations

microphone

Premium Member

Radio Shack strayed from their mission but would it have mattered?

One turn off I had of Radio Shack over the past couple of decades is the feeling that customers who just bought parts were an inconvenience to getting people to buy big ticket items. They also watered down their unique identity by carrying brands that everyone else had instead of keeping to their own exclusive names. I have an electronic thermometer at the office that has the Micronta name on it. I'm sure everyone is familiar with the Realistic line of audio equipment as well as the more premium Optimus brand which was later ruined by calling all audio equipment Optimus. I still have a few of the Science Fair XX in 1 kits.

Another bad sign which started a long time ago was the staff not being properly trained. I once stumped an employee by asking for a 6-volt lantern battery; and they were well-known for selling obscure batteries!

Even if Radio Shack had stuck to their niche, its hard to say whether they would have still been successful. Baynesville Electronics, who opened in 1955 in Towson MD, decided to close their doors last fall. They had everything but the kitchen sink and if the sink were made of electronic parts, they would have had that too. However, Baynesville chose not to sell online which is one advantage Radio Shack has; should Radio Shack have leveraged this avenue differently? I have to wonder if the downfall of electronics stores could also be the symptom of an increased lack of interest in what makes things tick in the electronics world.

I liked the photo of the Radio Shack Computer Center. I had one of those stores nearby way back then that had a greater selection of cartridges for the TRS80/Tandy color computer than their regular stores.
adowns
join:2002-11-23
Derby, KS

12 recommendations

adowns

Member

Well duh

Duh! They got into bed with Sprint. That's what happens.

jslik
That just happened
Premium Member
join:2006-03-17

10 recommendations

jslik

Premium Member

Now what?

How am I supposed to get the extended warranty on that spool of speaker cable I needed??
ham3843
join:2015-01-15
USA

6 recommendations

ham3843

Member

Love hate relationship with Radio Shack

It's sad to see RS go....for many decades until the mid 80s if you needed discrete electronic parts, were into SWLing, CB, or Amateur Radio RS was the place to go.

They had well trained staff, and many of them were genuinely interested in what you were trying to do and how to best help you. It all went down hill when the crappy execs decided it should be a gadget, toy, and cell phone store.

There definitely IS a market for these products even today, and if they would have returned to their roots and decreased the number of stores and focused on customer service again I believe they could have been successful. I also agree that they should have focused on on line sales as well....

One other lesser known fact is that quite a few stores are NOT company owned but independently owned franchises that....are much like the best RS stores were in the past.
I wonder what will happen to them. I wish that they would buy the name and reorganize the company.

I wish that SOMEONE with big pockets could buy the name and remnants of the chain and try and reboot back to what made them a household name. Definitely has to be a radio geek of epic proportions!

Same fate happened to the other very famous chain store Lafayette Radio Electronics back in the mid 80s.
Corporate
join:2014-10-04

1 edit

5 recommendations

Corporate

Member

Crap!

Now where am I supposed to buy my batteries?
Bryantf1982
join:2016-08-18
Kent, WA

4 recommendations

Bryantf1982

Member

TRS-80

My dad has bought all TSR-80 models from Radio Shaq but, I sat my 50 lbs high powered magnet in the box with all the data cassettetapes and floppy disks. So now those working TRS-80 computer models are useless.

Astyanax
Premium Member
join:2002-11-14
Melbourne, FL
·AT&T FTTP

3 recommendations

Astyanax

Premium Member

RS Was a Wounded Animal

I think Sprint knew RS was a wounded animal. They never intended to share any revenue with them and knew they'd go belly up so Sprint just waited RS out and watched them bleed to death. Afterwards they'd then scoop up the retail space for 10 cents on the dollar and voila they have the stores all to themselves.

BadAnonTechG
Premium Member
join:2006-03-27
Olean, NY

3 recommendations

BadAnonTechG

Premium Member

How the Mighty has Fallen

When i was a kid (i'm 34 now), If you wanted anything electronic you went to Radio Shack. Nothing could beat there quality, variety, stock or knowledge. Now you walk into a Radio Shack and 1st words out of their mouth after "Can I help you find something?" is either "We don't carry that" or "I don't think so, let me ask my manager" but not being in your store in months I found what I wanted and went and got it cheaper next door at Walmart. The Consumer knows more than they do about their products anymore. They are cheaper at Walmart, Kmart, Ebay, Amazon, Tigerdirect or Newegg. I could go on and on. Most of their stuff is made overseas as with most of electronics but you pay 5x the price for older not modern product. Time to put the nail in the coffin. Just have to know when to say no.

karpodiem
Hail to The Victors
Premium Member
join:2008-05-20
Troy, MI

2 recommendations

karpodiem

Premium Member

Not the worst move in the world

Retail space per sq. ft in most markets is as cheap as its ever been, and Sprint can probably pick the space up for cheaper after Radio Shack went into bankruptcy.

The creditors will want the largest bid for the spaces though, so someone might sneak up and grab it.

EliteData
EliteData
Premium Member
join:2003-07-06
Philippines

2 recommendations

EliteData

Premium Member

-

somehow, the local store by me was nearly cleaned out before the bankruptcy was even announced.
i got to the party a day late and managed to only get the scraps and spoils of war that was left.