RadioShack’s Chapter 11 filing underscores the dramatic changes U.S. retailing has undergone since online merchants and big-box stores began supplanting traditional brick-and-mortar chains.
RadioShack, the 94-year-old consumer-electronics chain, filed for bankruptcy with a plan to turn about half of its 4,000 stores into Sprint locations and close the rest.
“These steps are the culmination of a thorough process intended to drive maximum value for our stakeholders,” Chief Executive Joe Magnacca said in a statement Thursday.
The company said it has an agreement to sell 1,500 to 2,400 of its locations to a unit of Standard General, its biggest shareholder.
Standard General has a deal with wireless carrier Sprint to set up stores-within-stores at as many as 1,750 locations. The rest will be closed under a deal with a liquidator, Hilco Merchant Resources. The company employs about 21,000 people, full time and part time, in the U.S.
Most Read Business Stories
RadioShack did not provide details on how the bankruptcy proposal would affect stores and employees locally. According to the company’s website, there are 58 stores within 50 miles of Seattle. It’s unclear, though, how many of those are owned and operated by the company and how many are franchised locations.
The Chapter 11 filing in Delaware underscores the dramatic changes U.S. retailing has undergone since online merchants and big-box stores began supplanting traditional brick-and-mortar chains. The Sprint deal is especially telling, as RadioShack was one of the first mass-market retailers of mobile phones.
Sprint has more than 1,100 company-owned retail stores, which would more than double if the transaction is approved. It is expected to be finalized in the coming months. But other parties could bid for RadioShack’s stores in the bankruptcy process.
The company, based in Fort Worth, Texas, is also having discussions to sell all of its remaining assets overseas.
RadioShack has been trying to compete with Amazon.com and Wal-Mart Stores while at the same time coping with what Magnacca has called an industrywide slump in demand for consumer electronics.
Since taking over two years ago, Magnacca has changed the product mix and remodeled or closed some locations, to no avail. The company has reported 11 straight quarterly losses, and its shares dropped 86 percent last year.
The bankruptcy represents the endgame for a chain that traces its roots to 1921 in Boston, when it began as a mail-order retailer for amateur ham-radio operators and maritime-communications officers. The company was bought by Tandy Corp. in 1963.
It expanded into a wider range of products over the decades, and by the 1980s was seen as a destination for personal computers, gadgets and components that were hard to find elsewhere.
In 1977, it introduced the first mass-produced personal computer, the TRS-80, which was popular in high-school classes and earned the nickname “Trash 80.” A decade later, it became one of the first retailers of mobile phones.
In 2000, Tandy changed its name to RadioShack. An effort to rebrand the retailer as “The Shack” — de-emphasizing the company’s roots in 1920s technology — was quickly abandoned.
Since joining in February 2013, Magnacca, a former executive at Walgreen, has tried to revive the company with “Let’s Play!” a plan to make the retailer a “neighborhood-technology playground.”
He pared clutter, eliminated some small items and introduced interactive features, such as docks for Apple’s iPhone and walls of speakers. He also introduced the “Fix It Here” on-site repair service for mobile devices at hundreds of locations.
For all its struggles, the company still has some valuable assets, including a famous name that evokes nostalgia among hobbyists and locations at the heart of U.S. cities including New York, Chicago and San Francisco. Sprint and Standard General will be trying to build on that legacy.
The New York Stock Exchange suspended trading of its shares on Monday and sought to delist it. The NYSE requires companies meet certain market-capitalization thresholds to remain on the exchange.
The company, which has not turned a profit since 2011, employs about 27,500 people worldwide, according to its last annual report filed with the U.S. Securities and Exchange Commission.
It is seeking court approval to keep paying employees and honor customer programs and keep operating as it restructures.
RadioShack said Thursday that it also has more than 1,000 dealer-franchise stores in 25 countries, stores operated by its Mexican subsidiary, and operations in Asia operations, which are not included in the Chapter 11 filing. It wants to sell them.