Business

RadioShack seeks rescue and warns of bankruptcy

RadioShack exterior Image copyright Getty Images
Image caption RadioShack operates over 4,000 stores in the US, but has struggled to compete with online retailers

US electronics retailer RadioShack has said that it is in talks to restructure the firm but warned that if an investment is not secured soon, it could be forced to declare bankruptcy.

The chain has struggled to offload its costly real estate portfolio, even as it has shuttered stores.

Shares in the firm surged more than 18% on news that bailout talks were still progressing.

RadioShack reported a loss of $137m (£84m) in the second-quarter.

 

It operates approximately 4,485 stores in the US, which sell everything from mobile phone accessories to converters.

However, the company said that over the early summer period, sales at stores plummeted 20% from a year earlier.

Earlier attempts to close nearly 1,000 stores were blocked when lenders did not agree to the plans.

RadioShack chief executive Joe Magnacca said in a conference call on Thursday that the firm was considering several options, including a restructuring, a sale of the company, or a near-term investment.

The company said it had just $30.5m in cash on 2 August, although it had nearly $150m available to it under a line of credit.

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