Industry SectorsConsumer/RetailRadioShack Warns that Bankruptcy Possible

RadioShack Warns that Bankruptcy Possible

US electronics retailer RadioShack warned that it might have to file for bankruptcy protection, or even liquidate, in the absence of a cash injection.

In a regulatory filing, the chain said that in the continued absence of any external solution, it would be unable to finance its operations “beyond the very near term,” raising doubts about its future in business.

The company added that it was in talks with third parties and its financial stakeholders over a number of possible options, including a sale, a significant new investment or a restructuring. RadioShack said that some form of recapitalisation “may be our most likely course of action,” but that it could not guarantee such a deal.

Should the company fail to find a solution, the company could be forced to file for Chapter 11 bankruptcy protection, it said. In a still more drastic step, RadioShack added, it could be forced to liquidate.

Once an important player in the technology world, RadioShack has been seen as struggling to keep up with the digital revolution and has reported an unbroken string of quarterly losses since the beginning of 2012. The company has undertaken a restructuring effort for the last 18 months, though its ability to close stores has been limited by its agreement with its lenders.

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