Submitted by Rachel R on Wed, 03/08/2017 - 9:24am
Radio Shack in bankruptcy again
Image Source: Flickr User Mike Mozart
If you live in Wilmington, North Carolina and rely on Radio Shack for some of your tech needs, you may soon have to find another resource. Radio Shack has filed bankruptcy for the second time and will close nearly 200 stores representing close to 10% of its current retail locations, which number 1,943 as of this writing.
Radio Shack Files Chapter 11 Bankruptcy
Chapter 11 bankruptcy is filed by businesses in an attempt to reorganize their debts and continue operating. It allows time for a business to catch up on past-due payments on debt and find a better way to do business and stay afloat. The last time Radio Shack filed bankruptcy was back in 2015, and 2,400 stores closed.
In Wilmington, we’re down to just two Radio Shack locations. There is one location at Monkey Junction and another at Market Station. There is no word yet if either of the Wilmington stores will shutter as part of the latest business bankruptcy. The bankruptcy was filed last Wednesday in Delaware bankruptcy court by General Wireless.
Who Owns Radio Shack?
After Radio Shack filed bankruptcy two years ago, it was acquired by General Wireless, which is itself owned by Sprint and a hedge fund called Standard General. As part of that original filing, Sprint took over some or part of many stores that then became combined Sprint-Radio Shack outlets. With this second filing, some these combined stores will shut down.
General Wireless announced that 360 shared Radio Shack-Sprint stores would see the Radio Shack half of the stores closed down. There are another 971 shared stores whose fates are still undecided. The two Wilmington locations are both shared Sprint spaces and may be impacted. Close to one-third of Radio Shack employees will be hit by this second bankruptcy.
Stores Closing In March
The stores targeting for closing will roll up their awnings on Monday, March 13, and the stores that are left open may still be considered for closure. Radio Shack opened almost 100 years ago, and just four years ago, was among the top 10 of electronics dealers in the US. But since then, Radio Shack has lost hundreds of millions of dollars each year.
Since its first bankruptcy in 2015, Radio Shack has cut expenses and incorporated FedEx services and Sprint outlets into their store model, but slower than anticipated mobility sales have proven to be a problem. This second bankruptcy may be the last chance for Radio Shack to keep itself head above water or decide if they can’t keep the doors open.
Is Your Business In Trouble?
If you’re a business owner experiencing financial problems with your business, bankruptcy might help you get your debts under control to keep your business open. Chapter 11 is typically for larger businesses. If you’re a sole proprietor and most of your business debts are personally guaranteed by your personal assets and credit score, personal bankruptcy may be the best route.
Chapter 13 bankruptcy allows you time to reorganize your debts and catch up on past-due payments for a sole proprietor, as a Chapter 11, does for a larger business. A Chapter 7 is more appropriate when you want to close down your business and you know you can’t keep operations going. Businesses use this to shut down operations, and sole proprietors can use it as well to wipe out business and personal debt.
Is Business Bankruptcy Right For You?
The best way to know if bankruptcy is the best option for your Wilmington business is to consult a bankruptcy attorney experienced in working with North Carolina small business owners. The first consultation at the Wilmington location of the Law Offices of John T. Orcutt is free. Bring in your business financial info and talk to one of our experts about your options or read further about your options on our blog.
Contact our offices today to set up a free appointment for a Wilmington bankruptcy consultation today. Call +1-919-646-2654 now for a free consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.
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