New York – Emerging from bankruptcy under new ownership, a revamped RadioShack will begin taking shape April 10 with fewer stores, a slimmer assortment and a major new partner in Sprint.
Standard General, which won its bid this week for 1,743 RadioShack stores, said it will co-brand about 1,440 locations with the carrier to help reposition the chain as “the premier community destination for consumer electronics.”
According to court documents, the stores will initially deploy a “fast-start” format starting next week that uses existing fixtures while carving out a branded section for Sprint.
A full remodel featuring co-branded signage, an open floor plan and a dedicated Sprint space will roll out to approximately 1,500 locations pending approval by both companies.
Standard General said the re-born stores will feature emerging technologies that “enhance the traditional accessories, DIY electronics and innovation for which the company is known."
The new chain will also slash its SKU count by 75 percent, leaving a 1,000-item assortment in stores that will favor private-label audio and power products over slower-moving laptops, tablets and cameras, the Wall Street Journal reported.
All cellular sales will be relegated to Sprint, which will occupy and staff about a third of the sales floor.
“For us, the opportunity to increase our national distribution footprint by approximately 50 percent while delivering an appealing new format for our customers is incredible,” said Jaime Jones, president of Sprint’s postpaid and general business unit. “We look forward to rolling out the concept quickly and delivering valuable cross-marketing opportunities to both companies.”
Sprint’s brand will dominate the stores’ exterior signage, which is a safety precaution should Standard General lose the rights to the RadioShack name. The bankruptcy court split that and other intellectual property off as a separate asset sale, and top creditor Salus Capital Partners – which lost its bid to liquidate the chain and recoup its $150 million in loans – has first dibs on the brand. In the meantime, Standard General has six months to use the RadioShack name royalty free.
Gone is CEO Joe Magnacca, who stepped down Wednesday. The former drugstore executive gave up a fast-track trajectory at Walgreen’s two years ago to attempt a turnaround at the failing CE chain. Ironically, he had already begun to trim the assortment and vainly fought Salus to slash the store count from 4,100 locations, which was ultimately achieved through bankruptcy.
In a statement, Standard General managing partner Soo Kim thanked Magnacca and RadioShack’s board for their “tireless efforts and leadership throughout these challenging circumstances,” and said a new management team comprised of new and current RadioShack execs would be announced in the coming weeks.
Kim described the bankruptcy sale as “an important milestone in this storied company’s history,” which has allowed it to shed “stifling debts” and unprofitable business lines.
He said the new company has been reorganized around “a solid retail franchise underpinned by a world-class mobility carrier," and will now have the resources to “fulfill its core mission of providing more than 1,200 communities across the country with first-rate service and high-quality, high-value electronics and accessories.
“We look forward to partnering with the company’s 7,500 associates, its landlords, and with Sprint to rebuild a great American company,” he said.