Wilmington, Del. – RadioShack will hold its first store auctions on Wednesday.
The bids, which were due in last week, are for many of the 1,784 least profitable locations that are presently being liquidated and shuttered in three phases.
The first wave of store-closing sales was held in 162 locations through Feb. 17; the second wave, held in 986 stores, ends this Saturday; and the final phase of liquidations, to be conducted in 636 locations, will end by March 31.
CEO Joe Magnacca long argued that slashing the chain’s store base was crucial for its survival, but was hamstrung by loan terms that limited the company to 200 store closings a year.
The federal bankruptcy court here will hold a sale hearing for the first two groups of stores on Friday. [A store list showing qualified bids and lease terminations is available here.]
A monthly operating report and sales forecast, filed last week with the Securities and Exchange Commission, suggests that the fire sales will peak this week, when RadioShack expects to pull in about $75 million in cash, representing a 34 percent increase in retail comp sales. Projected sales will trail off to $26 million by the last week of March, when the liquidations are set to conclude, representing a comp decline of 7.4 percent.
Through its prepackaged Chapter 11 filing, RadioShack hopes to sell its remaining 1,750 preferred stores next month to lead investor and top shareholder Standard General.
Under the plan, the stores would be shared and co-branded with mobile carrier Sprint, but other bidders may enter the fray for the “A” list locations.