Last Thursday, February 5, 2015, RadioShack filed for Chapter 11 Bankruptcy after 94 years in business. According to documents filed with the Court, RadioShack listed $1.2 billion in assets and $1.38 billion in liabilities, with between 50,000 and 100,000 creditors. The company, which has not turned a profit since 2011, employs about 27,500 people worldwide, according to its last annual report filed with the U.S. Securities and Exchange Commission. It is seeking court approval to keep paying employees, honor customer programs and keep operating as it restructures.
RadioShack was founded in 1921 by Theodore and Milton Deutschmann in a storefront in Boston. RadioShack quickly rose to glory with the mass adoption of the radio and the rise of electronics. The company also became a top seller of the walkmen, CD Players, mini disk players and beepers. RadioShack also introduced one of the first mass-market personal computers The retailer eventually sold its first mobile phone in 1984 and eventually peddled over 73 million cellular phones over the last few decades. Ultimately, changing technology and consumer habits proved too much to overcome, which led to the bankruptcy filing on Thursday.
Although RadioShack has filed for bankruptcy, the company is poised to live on in a diminished form. Sprint and the hedge fund Standard General agreed to buy 1,500 to 2,400 of RadioShack’s 4,000 company-owned stores in the United States. Sprint is expected to run special “store within a store” departments in up to 1,750 of those stores, where customers will still be able to purchase RadioShack products, services and accessories. Sprint and Standard General will have to compete with potential rivals in a court-supervised auction. The remaining company-owned stores will then be closed.