FORT WORTH — Shares of RadioShack sank nearly 10 percent today after the company said late Thursday it would pull back on plans to close as many as 1,100 stores because it was unable to negotiate consent for the plan from its lenders.In a filing with the Securities and Exchange Commission, the Fort Worth-based electronics retailer said terms required by the lenders to gain consent for the mass closings “are not acceptable.”“While the company may continue to have discussions with its lenders regarding the proposed store closure program, the company is continuing with a plan to close fewer stores and pursuing other cost reduction measures,” the filing says.Moody’s Investors Service called the news “credit negative” since most of the stores the company wants to close are underperforming and the company will have to turn to “limited options” to reduce costs.RadioShack stock (ticker: RSH) closed down 14 cents at $1.33 a share. In March, RadioShack disclosed plans to close up to 1,100 of its 4,300 company-owned stores after posting disappointing holiday sales and a $191.4 million fourth-quarter loss. At the time, Chief Financial Officer John Feray said the retailer’s loan agreements required lenders to sign off on more than 200 store closings a year.Last month, The Wall Street Journal reported that negotiations with lenders, led by Salus Capital Partners and GE Capital, had grown contentious and that the dispute was complicating turnaround efforts.Anthony Chukumba, an analyst at BB&T Capital Markets, told The New York Times in an email that the dispute could lead to a bankruptcy filing.“Not being able to get the necessary waivers from their banks effectively sends RadioShack management back to the drawing board on formulating a turnaround plan — and time is increasingly not on their side,” he said. “That said, this is also a bit of a game of chicken. If the banks play hardball too much, RadioShack may end up being forced to file for Chapter 11 bankruptcy, which will leave the banks fighting over the scraps.”Under CEO Joseph Magnacca, hired in February 2013, RadioShack is trying to reverse the loss of sales to competitors including websites, phone companies and big-box retailers.
Steve Kaskovich, 817-390-7773 Twitter: @stevekasko