RadioShack will file for bankruptcy protection by next month, according to a report from The Wall Street Journal (WSJ). On the heels of the report, the retailer’s stock plummeted more than 35% as of the New York Stock Exchange’s closure on Jan. 15, 2015.
Yet RadioShack still has not commented on the matter, and has not confirmed any of the information provided by WSJ.
RadioShack is currently in talks with an undisclosed private equity firm that could potentially “buy its assets out of bankruptcy,” according to the report. However, there is speculation that if the talks don’t produce a deal that the retailer may try instead for a more typical reduction of debt and restructuring of its operations in bankruptcy court. The filing could take place as early as the first week of February, according to the report.
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The 94-year-old retailer has found itself in financial disarray in recent years, posting losses in each of the last 11 quarters.
During the current fiscal year, which ends Jan. 31, 2015, RadioShack has taken a variety of measures to stay afloat, including closing 175 of its stores. When releasing its latest quarterly results in December, the company revealed it had implemented a set of cost reduction initiatives expected to save more than $400 million annually.
The company previously formed an agreement with a consortium led by Standard General LP in an effort to restructure company debt prior to the 2014 holiday season. However, the deal required the retailer to have at least $100 million in cash or borrowing capacity by Jan. 15, 2015.
In a September 2014 SEC regulatory filing, RadioShack stated it would be required to file for Chapter 11 bankruptcy should it be unable to finalize a sale, partnership or restructuring plan.
