RadioShack files for bankruptcy in Delaware

Electronics retailer RadioShack Corp. filed for U.S. bankruptcy protection on Thursday and said it had a deal in place to sell as many as 2,400 stores to an affiliate of hedge fund Standard General, its lender and largest shareholder.

Wireless company Sprint Corp. would operate as many as 1,750 of those stores under an agreement with Standard General, Sprint said separately.

RadioShack’s bankruptcy, which has been expected for months, follows 11 consecutive unprofitable quarters as the company has failed to transform itself into a destination for mobile phone buyers. But its sale agreement with Standard General could spare it from liquidation.

RadioShack said in a statement that the Standard General affiliate, called General Wireless, will acquire between 1,500 and 2,400 of its more than 4,000 stores. There are 22 RadioShack stores in the Las Vegas area.

Sprint would occupy about one-third of each RadioShack store, selling “mobile devices across Sprint’s brand portfolio as well as RadioShack products, services and accessories,” Sprint said in its statement.

Other potential buyers will also have the opportunity to bid on RadioShack assets. Any deal will need approval by the U.S. Bankruptcy Court in Delaware.

Sprint’s chief executive, Marcelo Claure, in a statement said the deal will “allow Sprint to grow branded distribution quickly and cost effectively.”

In an interview with Reuters earlier on Thursday, Claure said RadioShack had “incredible store locations,” and he was keen to acquire some to cut down on long waits at Sprint’s current stores. “Customers have to wait one or two hours to get a phone and that’s not acceptable,” Claure said.

A spokesman for Standard General did not respond to a request for comment.

RadioShack, which listed $1.2 billion of assets and $1.39 billion of debts in its Chapter 11 filing, said it also has an agreement with a lender group led by DW Partners for a $285 million loan to operate while in bankruptcy.

It’s been a long, slow decline for RadioShack. Losses have been mounting, and in its latest quarterly sales plunged 16 percent from a year ago.

Cash-strapped, RadioShack found itself saddled with thousands of stores at the beginning of last year, many of which it couldn’t afford to keep open.

But closing stores is expensive because of the cost of severance, liquidating merchandise and paying penalties to get out of leases.

And RadioShack has been so low on cash it couldn’t afford to close enough of the stores strangling its business.

Last March, the company announced a plan to close about 1,100 stores, but it was only able to close 175 stores through the end of October. By year’s end it was battling with its lenders to get the green light to close more.

Once upon a time, RadioShack boasted about its vast retail network, saying that 90 percent of the U.S. population lived or worked within a few minutes of a RadioShack location.

But with online shopping, those brick-and-mortar stores became dead weight.

RadioShack goes back to 1921, when it opened a store and mail-order operation in Boston to serve the needs of radio officers aboard ships. It was bought in 1963 by Tandy Corp., a retailer that started as a supplier of leather parts to shoe repair shops.

For a time RadioShack prospered from Americans’ growing love affair with technology. It introduced one of the first mass-market personal computers, the TRS-80, in 1977, and one of the first laptops, the Model 100, in 1983. It also was an early seller of both cell phones and satellite television systems.

CNN contibuted to this report