RadioShack Corp the electronics chain based in the U.S. filed on Wednesday for bankruptcy protection. The filing was the second by RadioShack in just over two years. The company is battling a tough, competitive retail environment and a partnership that has not worked out with Sprint Corp, the wireless provider.
The filing, for Chapter 11, arrives after RadioShack, which General Wireless Operations owns, attempted to revitalize the business through co-branding stores with Sprint in an attempt to compete with their much larger rivals.
General Wireless, which in 2015 purchased the RadioShack brand, listed the assets and liabilities of the company from between $100 million and $500 million in a Delaware bankruptcy court.
RadioShack is set to shutter close to 200 stores, while evaluating its options on the other 1,300, it said in a prepared statement.
Sprint is going to convert several hundred stores into corporate owned locations, it announced in a separate prepared statement.
The bankruptcy filing by RadioShack and its store closing will not have a material effect on Sprint’s overall sales, the company added.
RadioShack is close to 100 years old and attracted loyal electronics enthusiasts due to its different specialty products like the walkie talkies it has.
It filed its first bankruptcy back in 2015 after the popularity of mobile handsets caught the company off guard and clients stopped shopping there and headed to big box stores including Amazon.com and Best Buy Co.
In its attempt to maintain its 1,740 stores open, RadioShack entered into a partnership with the wireless provider Sprint while in its first bankruptcy, inviting Sprint to co-brand with RadioShack and establish stores that were smaller within in its own stores.
At that time, Sprint looked at the retail footprint of RadioShack as a way to scale up its business and RadioShack was hoping to benefit from more liquidity coming from commission and rent payments from Sprint.
However, since then RadioShack has come out of bankruptcy and both companies have had challenging times.
Sprint, whose wireless network is looked at by analysts as being inferior to the largest carriers in the U.S. Verizon and AT&T, has had to offer large discounts to increase its business.
Sprint’s challenges, which have led to steep drops in sales toward the end of 2016, meant that RadioShack was receiving less commission that it expected, said the company in the bankruptcy filing on Wednesday.
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