RadioShack's owners could be facing its second bankruptcy since 2015 as it prepares to close some 200 stores.
The Wall Street Journal reported that General Wireless Operations, which has been doing business under the RadioShack name since 2015 in partnership with Sprint, was closing the stores while it prepared to file for bankruptcy possibly this week, according to sources.
General Wireless was formed as a partnership between Sprint and Standard General LP, a RadioShack creditor, in 2015. RadioShack sold some 1,700 stories to Standard General when it filed for bankruptcy then and closed half of its 4,000 stores still in operations at that time, Bloomberg noted.
The General Wireless deal ushered in about 1,400 co-branded RadioShack locations with Sprint, plus several hundred franchised units, Bloomberg said.
The Dallas Morning News reported that employees have been laid off at General Wireless' headquarters in Fort Worth. One of the company's suppliers told the newspaper that it has not been able to reach his regular Radio Shack contacts.
The Fort Worth Star-Telegram wrote Monday that Sprint had removed its wireless product displays from some area RadioShack stores there. The newspaper said Sprint products were pulled out of Dallas-Fort Worth suburban RadioShack stores in Bedford and Arlington.
"The liquidation of Circuit City Stores in 2009 was expected to give other electronics retailers some breathing room, but Amazon.com kept eating away at their market share," Fortune writer Phil Wahba said.
"Best Buy has found its way through the wreckage and stabilized its business, but hhgregg, a smaller furniture and electronics chain, filed for bankruptcy on Monday and said it would close one third of its stores," Wahba continued.
Bloomberg reported that General Wireless created a financing package in 2015 that included a $50 million asset-backed credit line, led by RBC Capital Markets, and another $25 million term loan from Great American Capital Partners.
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