Just days after RadioShack (NYSE:RSH) was saved from liquidation by hedge fund Standard General, the company is laying out blueprints for what the future will look like moving forward, including what its name might be.
Soohyung Kin, the financier who oversaw the retailer's overhead reduction, hashed out plans to secure a second wind for a gutted RadioShack during a conference call with all those connected to the retail chain, from landlords and vendors to employees, according to the New York Times.
Standard General has officially taken over about 1,700 of RadioShack's 4,000 stores, as of last Tuesday, after finally winning court approval. The process to acquire RadioShack proved to be glacial, as Salus Capital Partners vied to push a plan that would liquidate the retailer, leaving only its fundamental assets in exchange for a hefty sum. However, Standard General's bid included a promise to preserve 7,500 jobs, and ultimately the economic advantages of the hedge fund's bid to keep people employed led to its victory.
"We always believed that when you stripped away its relatively heavy cost structure, and some of the legacy ways they did business, there actually was a core here that was worth saving," Kim said during the conference call.
Still, one big questions remains as to what's left of the reputation and customer loyalty that once defined the 94-year-old electronics chain. RadioShack, which had to officially file for bankruptcy protection, has been on a slow decline for years due to an inability to compete with the online prices of its rivals.
The new RadioShack will function as an electronics convenience store, offering chargers, Bluetooth headsets and other supplementary tech goods for consumers on the go. Larger items such as cameras and laptops will no longer be sold, and phone sales will be handled by Sprint, a partner in the new deal. Sprint will occupy up to 60 percent of the new store's floor space and take sales commission.
Earlier this week Ron Garriques, a former Dell and Motorola executive, was chosen by Standard General as RadioShack's new CEO. He said the new RadioShack will focus on smaller markets in cities with populations between 5,000 and 100,000, where demand still exists for a neighborhood electronics store. RadioShack plans to mostly abandon larger markets such as Manhattan, where the number of locations will drop from 30 stores to just three stores. The future lies in neighborhood stores, according to Garriques.
However, much of the brand's future remains unknown. Salus, RadioShack's largest creditor, still owns the rights to the company's name, at least for the next six months. Standard General may try and buy out the iconic name but reportedly isn't opposed to calling the stores something new.
-See this New York Times article
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