When the decision makers at a company decide to file for Chapter 11 bankruptcy protection, the decision is often made only after a string of bad years, coupled with every effort to turn things around. For the well-known electronics company RadioShack, that certainly appears to be the case.
According to a recent report, RadioShack filed for Chapter 11 on February 5. The company hasn't turned a profit in about four years. There are approximately 4,000 RadioShack retail stores throughout the United States. Of these thousands of stores, the company will close hundreds, including almost 200 in California, in an effort to revive the company.
The reports indicate that 175 RadioShack locations will be closed in California, including many in Southern California from Los Angeles to San Diego. Another 1,500 to 2,400 locations throughout America will be sold to General Wireless, which reportedly intends to set up Sprint cellphone operations within the locations. It appears that filing for Chapter 11 bankruptcy will only have an impact on RadioShack locations within the United States, not on the many retail locations operating in Asia or on the franchise locations in 25 other countries.
Sometimes when a company cannot adapt to changing economic conditions quickly enough, a bankruptcy filing is the only option. The reports indicate that RadioShack has been the victim of the same thing many other retail companies are facing: the Internet. As Americans shift more and more toward purchasing goods online, the companies that have actual, physical retail locations are feeling the negative effects on their bottom lines.
Source: LA Times, "RadioShack to shut 175 California stores; see where they are," By Shan Li and Lauren Raab, Feb. 6, 2015