Half America’s RadioShacks May Become Sprint Stores, In Saddest Retail Transformation Ever

Bloomberg News is reporting RadioShack is in talks for a bankruptcy deal that would result in closing half its stores and selling the rest to Sprint.

AFP / Getty Images SAUL LOEB

RadioShack has been circling the drain for what seems like an eternity. But the saga could get even sadder if a new report about a store sell-off to Sprint is true.

RadioShack is reportedly pursuing a bankruptcy deal under which it would close half of its more than 4,000 stores and sell the rest of its leases to Sprint, killing the RadioShack brand name, Bloomberg News reported today. The two chains have discussed co-branding the stores into some kind of Sprint-RadioShack entity, Bloomberg reported, citing two anonymous people familiar with the discussions.

RadioShack’s continued survival has been something of a running joke in the business world for the past decade, despite creative stabs at turnaround and a revolving door of CEOs. The Onion, way back in 2007, wrote an article titled “Even CEO Can’t Figure Out How RadioShack Still in Business.” Amazon, Best Buy, and Wal-Mart have only grown since then, beating RadioShack in assortment, price, and convenience.

Mass store closures at the company would be a disaster for potentially tens of thousands of retail workers. The chain said in its most recent annual filing that it employed about 27,500 people as of Dec. 31, 2013, though it has conducted some layoffs since then. On Jan. 22, RadioShack said it received a notice from the New York Stock Exchange saying it would be delisted from the market due to its low valuation, which had slumped to below $50 million. The company, whose shares were down by about 13% on Monday afternoon, currently has a market cap of just $28 million.

RadioShack declined to comment for this article.

Beyond the heavy job losses, the notion of RadioShack stores evolving into Sprint locations is somewhat heartbreaking, akin to watching a a sad, struggling caterpillar metamorphose into an equally sad, struggling butterfly. Sprint, the third largest U.S. mobile operator, recently reported that it lost subscribers for an 11th straight quarter, and would cut 2,000 jobs. Verizon, AT&T, and T-Mobile all continue to gain customers.

The chairman of Sprint, Masayoshi Son, has reportedly been seeking to fix what he refers to as a “loser” mentality at the Overland Park, Kansas–based company.

Read more: http://www.buzzfeed.com/sapna/saddest-metamorphosis


Caché Follows Wet Seal And Delia’s In Filing For Bankruptcy

The almost 40-year-old purveyor of prom dresses filed for bankruptcy this morning.

Caché is the latest mall retailer to file for bankruptcy in a brutal quarter that’s already claimed Wet Seal, dELia*s, DEB Shops and C. Wonder.

The company, which has been working towards a turnaround for the past two years, said in a statement today that “the depressed brick and mortar retail market, the continued growth of online shopping, and rapidly changing consumer tastes and habits thwarted our efforts.” Caché said in December it was searching for a buyer but apparently couldn’t find one in time.

It plans to liquidate its inventory through going-out-of-business sales, according to bankruptcy filings, and also work to negotiate some leases. The chain said it’s “critical” to start liquidation sales by March 4 based on the cash drain from stores and because its inventory is seasonal.

The New York-based mall chain, which says it employs around 2,500 people, is best known for its special-occasion dresses, which account for more than half its sales, according to bankruptcy filings. The company, which sells more than 90% of its clothing under the Caché label, forecast just over $200 million in revenue for the latest fiscal year.

The company noted its two major missteps in recent years were a rapid expansion to 306 locations, leading to a number of underperforming stores, and a “reorientation” from core, high-margin, high-end dresses and accessories into “the lower-margin casual sportswear business.”

The first Caché was opened as a boutique in Miami in 1976 by a woman named Marilyn Rubinson. Rubinson, according to the company’s website, was the first to bring designs by Armani and Versace to the U.S.

“Marilyn’s Caché was more fashion club than retail operation,” the website says. “It was a place where shoppers were treated like girlfriends, fashion was fun and women were fabulous.”

The company filed for bankruptcy today “with the goal of securing Caché’s future,” Jay Margolis, Caché’s chairman and CEO said in today’s statement. “Ultimately, we have not had the time or capital to realize all of the benefits of our hard work.”

Read more: http://www.buzzfeed.com/sapna/cache-bankruptcy