RadioShack is reportedly in active talks with Sprint to sell leases on some of its stores to the wireless carrier as the Fort Worth-based consumer electronics retailers makes plans for a bankruptcy filing.
Bloomberg News reported the Sprint talks on Thursday afternoon, citing a person with direct knowledge of the matter. The report said that RadioShack would seek to emerge from bankruptcy with 2,000 to 3,000 stores, compared with the more than 4,000 it now has.
On Wall Street, investors sold off RadioShack shares following a Wall Street Journal report that the company is preparing to file for bankruptcy perhaps by early February. RadioShack stock (ticker: RSH) lost 15 cents, or 35 percent, to close at 26 cents a share.
RadioShack has been wanting to jettison hundreds of stores since last spring, when the company announced a plan to close as many as 1,100 of its 4,300 company-owned locations. But the plan failed to win necessary consents from its lenders, as the parties couldn’t agree on financial details.
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Losses and sales declines accelerated for the company last year as store changes instituted by CEO Joseph Magnacca, hired in February 2013, failed to show immediate results. In December, the company reported a $161 million loss for its third quarter as sales declined by 16 percent.
The company has been reaching out to potential lenders for a loan that would finance its operations during bankruptcy court proceedings, said the person and two other people with knowledge of the talks.
Standard General, RadioShack’s biggest shareholder, which arranged a rescue package in October, offered a restructuring loan that includes plans for asset sales in bankruptcy, two sources told Bloomberg. Salus Capital Partners has offered an alternate financing plan.
RadioShack spokeswoman Merianne Roth, David Glazek, a spokesman at Standard General, and Emily Serafin, a spokeswoman for Salus, declined to comment, as did Scott Sloat at Sprint.
This report includes material from Bloomberg News and the Star-Telegram archives.