(USA TODAY) -- RadioShack, the once invaluable seller of cords, eight-track players and VCRs, filed for bankruptcy protection Thursday.
The ubiquitous retailer becomes one of the most storied brands to file for bankruptcy protection amid pressure from online retailers and big-box stores. The firm, made famous by its former CEO Charles Tandy in Fort Worth, Texas, traces its roots back 94 years.
Plans for the company's future will keep the RadioShack brand alive, albeit with roughly 50% fewer stores and in a co-branded fashion with wireless telecom seller, Sprint. For all practical purposes, it's the end of RadioShack as consumers know it, says Morris Ajzenman, analyst at Griffin Securities. "This is the end. There's nothing to say. It's history. It's a dinosaur. It's a has-been," he says.
RadioShack personifies the type of brick-and-mortar company that's struggled amid the growth of online rivals like Amazon.com. Many of the cords and electronic products sold in the stores can be purchased at much lower prices online, while RadioShack must manage 4,000 company-owned stores across the country.
"We've seen this in the past. Major retailers that don't adapt over time disappear and fade away," Ajzenman says.
Current CEO Joseph Magnacca, a former Walgreen executive, tried to revitalize the brand by introducing more products popular with today's consumers, such as smartphones and bluetooth speakers. Many of the stores were also remodeled, locations closed and advertising ramped up. The company had the sleeper hit Super Bowl advertisement last year, featuring celebrities famous during the 1980s, like pro wrestler Hulk Hogan.
But the turnaround hasn't panned out. RadioShack's revenue has fallen each and every year since 2006. RadioShack's revenue of $2.3 billion during the twelve months ended Nov. is 46% below where it was in 2010. The company reported a net loss of $633 million in the 12 months ended in Nov.
The biggest owner of RadioShack is Lightspeed Management, which reported a position of 8.9 million shares or 8.8% as of the most recent data available on Oct. 3, 2014, says S&P Capital IQ. But the future lies with activist investor Standard General – the second largest owner of RadioShack stock, with 8.1 million shares or 8.1% of the outstanding shares. Standard General says it plans to buy 1,500 to 2,400 of the RadioShack stores.
Standard General's plan will establish "store within a store" locations with Sprint in up to 1,750 of the bought stores, according to RadioShack. The plan is subject to court approval. RadioShack is negotiating what to do with its other assets, including the stores not part of the Standard General deal. Stores not part of the Standard General sale will be closed. The company reported total assets of $1.2 billion as of November 2014 and liabilities of $1.4 billion.
"The RadioShack brand is not going away," said a creditor with direct knowledge of the plan, who was not authorized to speak on the record. "It won't be a liquidation like Circuit City or Linens 'n Things, this person said, referring to retailers that no longer exist.
The idea is to give a certain square footage to Sprint in its stores in areas where Sprint doesn't already have a presence, the creditor told USA TODAY.
The company was created by the melding of two different companies, the Hinckley-Tandy Leather Company and RadioShack. Hinckley-Tandy was founded in Fort Worth, Texas in 1919 as a leather goods firm. RadioShack traces its roots to Boston in 1921, as a radio supplier for ship officers. Hinckley-Tandy ultimately sold its leather business in 1954 – and changed its name to Tandy in 1963. Tandy bought RadioShack – putting the combined firm squarely in the electronics business. The company officially changed its name to RadioShack Corp. in 2000 – and was listed on the New York Stock Exchange under the symbol RSH.
Tandy is perhaps best known as being one of the pioneers in the personal computer industry. The company's TRS-80 computer, launched in 1977, was a big hit with early computer enthusiasts and helped launch the home computer revolution. Many programmers today got their start programming on the computers, nicknamed "Trash 80s." Many consumers made a habit out of visiting RadioShack stores to receive free batteries and check out the latest gadgets ranging from TVs, flashlights and electronic toys.
The company was already delisted from the New York Stock Exchange. Shares trade over the counter by the symbol: RSHC. Shares closed Thursday at 10 cents, down 12%.
13 Radio shacks in Maine have closed, the full list of stores in Maine are listed below:
TOPSHAM FAIR MALL - 49 TOPSHAM FAIR MALL RD - TOPSHAM
THE MARKET PLC @ AUGUSTA - 37 XAVIER LOOP - AUGUSTA
AUGUSTA PLAZA SHOP CTR - 52 WESTERN AVE - AUGUSTA
AIRPORT MALL - 1129 UNION ST - BANGOR
COLONIAL MARKETPLACE - 55 COLONIAL DR - STANDISH
1600 MAIN ST - OXFORD
UNION STATION PLAZA - 264 ST JOHN ST - PORTLAND
HANNAFORD PLAZA - 149 DUBLIN ST - MACHIAS
BANGOR MALL - 663 STILLWATER AVE - BANGOR
AUBURN MALL - 550 CENTER ST - AUBURN
MAINE MALL - 367 MAINE MALL - SOUTH PORTLAND
COOKS CORNER SHOP - CTR 8 GURNET RD - BRUNSWICK
45 WELLS PLAZA - WELLS
For the full list of RadioShack locations closing:
