Almost a century after it first opened its doors, embattled electronics retailer RadioShack declared Chapter 11 bankruptcy on February 6.
According to NBC News, the Fort Worth, TX-based company, which was once the go-to store for consumer electronics, has struggled with years of continuous profit losses as online shopping has become more popular and its wireless sales dwindled.
In a Chapter 11 bankruptcy, businesses and corporations are legally protected from creditor lawsuits as they create a court-approved debt restructuring plan. With just 8,980 Chapter 11 bankruptcies filed in 2013, this is the least common form of bankruptcy.
As part of its debt restructuring, RadioShack will permanently close 1,784 of its total 4,485 store locations. Sprint has agreed to a “store-in-store” model in which the phone company would purchase 1,750 RadioShack locations and keep the brand alive in these acquired shops. Online retail giant Amazon is considering moving into RadioShack stores to establish pick-up and drop-off centers for its customers, as well.
As of November, RadioShack has listed assets amounting to $1.2 billion and debts of $1.3 billion. In its most recent sales quarter, the retailer reported sales losses of 16% from the year before.
While its Chapter 11 bankruptcy will allow RadioShack to stay afloat, having 29 RadioShack locations close throughout Maryland, Virginia and Washington, DC amounts to hundreds of lost jobs throughout the area in the span of a few weeks, according to website DCInno.com.
This influx of unemployment, while undesirable, is also unavoidable — RadioShack no longer has the means to keep these stores staffed. And if Amazon and Sprint hold to their intentions of buying RadioShack locations, more job loss may be preventable in the long run.
At its peak, RadioShack boasted that 90% of Americans lived or worked just minutes away from a RadioShack store. After its Chapter 11 bankruptcy, the number of Americans who can say they live near a RadioShack will likely plummet.