Struggling mobile and electronics retailer RadioShack is negotiating a deal to sell to Sprint (NYSE: S) the leases to some of its stores. RadioShack is reportedly on the verge of filing for bankruptcy protection.
According to Bloomberg and the Wall Street Journal, RadioShack may soon file for bankruptcy after 11 straight quarters of losses amid a downturn in sales at its physical retail stores. The electronics retailer may offload some of its stores to Sprint. Separately, the Wall Street Journal reported that RadioShack has delayed paying January rent on some stores as part of an effort to save cash during its restructuring.
RadioShack currently operates around 4,300 stores in North America, not counting dealers and franchisees, according to the Journal. Under the developing plan, RadioShack would seek to exit bankruptcy with around 2,000 to 3,000 stores, Bloomberg reported. The company also has been reaching out to potential lenders for a loan that would finance its operations during the reorganization.
Sprint and RadioShack declined to comment, according to Bloomberg.
The bankruptcy loan, known as debtor-in-possession financing, would fund RadioShack's operations during the Chapter 11 proceedings.
Sprint CEO Marcelo Claure said an investor conference last week that the company would be expanding its operations, in part by adding retail locations. "This is a year in which we intend to grow our distribution dramatically," Claure said. "You are going to see the opening of more and more Sprint stores as this is one area that we work on."
Sprint has around 1,100 company-owned retail stores, a smaller footprint than the more than 2,000 owned by AT&T Mobility (NYSE: T) and Verizon Wireless' (NYSE: VZ) 1,700 stores.
For more:
- see this Bloomberg article
- see this WSJ article (sub. req.)
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