Sprint, Amazon Consider Acquisition of Radio Shack Stores

 
 
By Todd R. Weiss  |  Posted 2015-02-03 Print this article Print
 
 
 
 
 
 
 
Radio Shack bankruptcy

Both Sprint and Amazon might use the stores for retail locations of their own as the bankruptcy-bound Radio Shack appears to be headed for extinction.

In two separate deals, Sprint and Amazon are "in talks" with the financially beleaguered Radio Shack store chain to lease some of its 4,000 U.S. stores as part of the company's bankruptcy and use them in the future for their own retail outlets.

Both deals were revealed in individual Feb. 2 reports by Bloomberg, which identifies the sources of the information as people who are close to the talks.

If such a deal is made with Sprint, then Radio Shack could sell about half of its store leases to Sprint, while closing the rest of the stores, according to Bloomberg. In a separate move, Amazon has also been discussing the option of taking over some Radio Shack stores "as showcases for the Seattle-based company's hardware, as well as potential pickup and drop-off centers for online customers," according to another Bloomberg report.

Amazon's rumored move to take over some Radio Shack stores would come after the chain files for bankruptcy, the report continued. Other potential bidders for Radio Shack's stores also include the investment group for the Brookstone retail chain, according to Bloomberg.

Sprint is interested in 1,300 to 2,000 of the Radio Shack locations, based on the reports.

"The negotiations could still break down without a deal being reached, or the terms could change," according to Bloomberg. "Sprint and Radio Shack also have discussed co-branding the stores, two of the people said. It's also possible that another bidder could emerge that would buy Radio Shack and keep it operating, the people said."

For both Sprint and Amazon, the use of the Radio Shack stores could add retail locations that could help both companies get their goods and services out to more consumers, which could increase their sales.

Sprint remains locked in a tough mobile marketplace against its main rivals, Verizon Wireless and AT&T, which rank first and second respectively in the U.S. Sprint is trailed in the United States by T-Mobile, which it tried unsuccessfully to acquire back in 2014.

In November 2014, Sprint announced that it lost $192 million on consolidated net operating revenue of $8.5 billion in the company's second fiscal quarter of 2014, ended Sept. 30, while also losing some 272,000 postpaid customers in the quarter. Other bad news in Sprint's second-quarter earnings report was the announcement that another 2,000 employees will lose their jobs as the company tries to save money and turn its financial performance around.

The company will report its fiscal third-quarter earnings on Feb. 5.

Sprint continues to be in a tough battle with its main rivals to lower prices and add data to gain new customers, which has resulted in an intriguing battle over the last year for all of the companies.

Sprint said in November that it was beginning to see promising results from recent price drops and service increases in its cellular plan pricing aimed at adding users. Postpaid phone gross additions grew 37 percent month-over-month in September and increased year-over-year for the first time in 2014, the company stated. In addition, Sprint platform postpaid phone net losses slowed by nearly 60 percent in September 2014, while Sprint achieved its most successful iPhone launch in the carrier's history, with record sales volumes, according to the company.

 
 
 
 
 
 
 
 
 
 
 
 
 

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