Closing of Radio Shack

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Created on Friday, 06 February 2015 16:57

Written by Julia Rose

AROUND THE NEK-- Last night Radio Shack declared bankruptcy and announced it will be closing about half of their stores. The news came after the company made a deal with General Wireless Inc. to buy about 1,500 to 2,400 of their 4,000 U.S. stores.

With about 1,750 of the stores General Wireless will be taking, they will be working with Sprint to create a store within a store. Radio Shack's sales have been down 16 percent, and stock prices have fallen 90 percent in the last quarter. They have not turned a profit since 2011, which is the reason many people are not surprised by this sudden breaking news.

Last year the company let known to the public that they would be selling 1,100 of its stores but was only able to sell 175 stores by the end of October. The biggest problem with closing the stores is the cost involved. It is expensive to get out of leases, liquidate merchandise, and the cost of severance is high.

There are about 20 stores in Vermont, one right in St Johnsbury. There has been no statement yet of the St. Johnsbury Radio Shack to be one the stores to close or become a Sprint store.