Sprint Corp Said to be in Talks to Purchase RadioShack Stores

RadioShack Corporation, which is nearing bankruptcy, is reportedly in discussions with Sprint Corp to sell leases on some of its stores.

Citing insiders close to the situation, the struggling consumer electronics retailer is attempting to reduce its total number of stores from over 4,300 to between 2,000 and 3,000 prior to completing its bankruptcy reorganization.

The retailer, which has posted losses for 11 consecutive quarters, is expecting to file in February for Chapter 11 bankruptcy protection.

It also is seeking possible lenders to help finance operations during the probable court proceeding if they file Chapter 11.

The company, which is strapped for cash, has stopped making its rent payments in January on some stores, as it searches to save on cash for its efforts to restructure, according to reports from a national newspaper.

One leasing representative told one landlord that the company was planning to come out stronger and smaller from the different changes.

RadioShack has lost business to retailers online and has attempted to lower the amount of stores. However, bankers have not liked the idea.

At the same time, Sprint is searching for ways to expand its retail footprint, as it attempts to compete better with Verizon Communications and AT&T.

In early January, Marcelo Claure the CEO at Sprint said the company was searching for ways to expand its retail bases and bringing its different services to even more consumers.

Sprint, which is trying to reverse a number of years of losses in subscribers, has been aggressive with pricing and promotions during the past couple of months.

It is attempting to introduce new plans to attract more subscribers from its rivals Verizon and AT&T.

Therefore, the wireless provider needs more presence where those subscribers are. Sprint also has extended it reduce your bill by half promotion through all of 2015. The promotion has helped to attract many subscribers to sign on from the larger carriers.

However, with only a retail presence of 1,100 stores that are company owned, Sprint lags behind its biggest competitors.

AT&T has over 2,000 stores and Verizon more than 1,700.

 

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