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Retailers and Bankruptcy

On February 5, 2015, news broke of the most recent retailer to file bankruptcy--Radio Shack. For those of you unfamiliar with the nearly century old retailer, it began in 1921 when two brothers opened their Boston, Massachusetts store to provide equipment to ham operators. Over time, Radio Shack expanded into the retail electronics business and could be found in malls all across the country.

As a result of the Chapter 11 Bankruptcy filing, Radio Shack intends to close 1784 stores. According to an article published in The Standard Times on February 11, 2015, included in that line up are stores located in the Dartmouth Mall, Fairhaven, New Bedford, Fall River and Swansea. Radio Shack indicated these stores will close by the end of February so they do not have to pay rent for the month of March.

By filing for a Chapter 11 Bankruptcy, Radio Shack does not necessarily intend to go out of business. Chapter 11 Bankruptcies are used by corporations to rebuild themselves by shedding some debt and shielding themselves from creditors.

Radio Shack is not the first retalier to file Chapter 11 Bankruptcy. Others have done so successfully and for others it was not enough to make a come back. It will interesting to see if Radio Shack will emerge a stronger more profitable company.

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