After filing for Chapter 11 bankruptcy twice in two years, closing thousands of its corporate-owned stores, and auctioning off its corporate treasures, RadioShack is improbably still around. A new plan for getting out of bankruptcy filed with the court spells out the company’s plans, which involve online sales, franchising its brand, and somewhere between a few dozen and no corporate-owned stores.
That’s a surprising contrast for a company that had 8,000 stores not too long ago, and began its first bankruptcy with just over 4,000. Since then, the company has sold its own name to an outside firm, liquidated the inventory in its warehouses and in thousands of stores, often leaving employees without information about what was happening to their stores.
The bankruptcy judge has set an Oct. 25 hearing on this plan, The Wall Street Journal reports. It only nominally saves the company, and depends on lawsuits against former retail partner Sprint to make up the rest of the money due to its creditors.
Standard General, the hedge fund that put together the 2015 deal to save the RadioShack brand, will continue to own the retail operation (while it still exists), act as a wholesaler of RadioShack brands and other electronics to dealer/franchisees, and run the website. In return, the company will take $5 million of the chain’s secured debt.
The franchisees are fine
Dealer-franchisees, at least, are excited about the new business model. The first new store to open since the bankruptcy, in Baraboo, WI, was an existing locally-owned electronics store that took over the area’s franchisee license when the previous Shack closed.
“Radio Shack will work in almost any small town,” the owner told the Baraboo News Republic. “People want service.”
Providing competent repair services is part of the business models of both old and new franchisees.