RadioShack added to its stable of outside advisers Wednesday, hiring a former Wall Street executive who helped advise the Treasury Department during bailouts of General Motors and Chrysler to the new position of chief revitalization officer.
Harry Wilson, founder of the advisory firm Maeva Group, will report to RadioShack’s board and CEO Joe Magnacca, the Fort Worth-based company said in a statement.
The struggling electronics retailer, which inked a new financing package this month to help it stay out of bankruptcy, cited Wilson’s experience reviving U.S. automakers after the recession. He was a senior member of the Auto Task Force, which led the Treasury Department’s role in revamping GM and Chrysler.
“Harry Wilson’s experience in guiding companies through successful turnarounds speaks for itself and will be extremely valuable as we continue our efforts to revitalize the company,” Magnacca said in the statement.
RadioShack’s recent deal with hedge funds Standard General and LiteSpeed Management provided cash to help get through the holiday season and loosened restrictions on what the company can draw on a revolving line of credit. It may also give the retailer more leeway to close unprofitable stores.
In return, the hedge funds have the right to convert the loans into equity in the coming months, if the company achieves certain financial goals, and then nominate four members of a reconstituted seven-member board. Such a conversion would give them a controlling stake in RadioShack.
David Schick of Stifel Nicolaus said in a client note that Wilson’s background “brings expertise and gravitas toward a turnaround or restructuring.” Still, Schick said he continues to believe that RadioShack needs more capital infusions and flexibility from lenders or it may run out of capital some time in 2015.
Scott Tilghman, an analyst at B. Riley & Co. in Boston, said Wilson’s appointment is “a bit of a head scratcher” since he has doesn’t have a retail background. RadioShack’s main challenge is getting customers back into stores, Tilghman said.
Magnacca has worked to revamp stores and merchandise, making locations more interactive and adding services like on-site repair. So far, none of the initiatives have stemmed the decline in the business, which has posted 10 straight quarters of losses. The company had $30.5 million in cash on Aug. 2.
The company has already enlisted AlixPartners, the well-known turnaround consultant; investment bank Peter J. Solomon; and law firm Jones Day to provide advice.
RadioShack shares (ticker: RSH) declined 3 cents a share Wednesday to close at 99 cents.
This report includes material from The Associated Press and the Star-Telegram archives.