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Despite multiple bankruptcies, RadioShack continues to find ways to keep the lights on

The Shack is back! It seems even a second bankruptcy was not able to keep RadioShack down. Whereas the first bankruptcy was saved largely by a deal with Sprint, this solution is going to look a little different. The New York Post ran a good summary of how this is all coming together.

“We came out of bankruptcy with 400 dealers, our online business, and a distribution center,” said Steve Moroneso, chief executive of General Wireless, an affiliate of hedge fund Standard General, which acquired RadioShack in 2015.

This means that RadioShack will no longer be owning and operating any stores. It’s shuttered all brand owned retail locations and is leaning on its 400 dealers (essentially franchises). But it’s also incorporating another retail solution entirely:

The hobbled 97-year-old chain has signed a deal with HobbyTown USA to open “express stores” inside 50 of its partner’s stores, both companies said Friday.

The HobbyTown arrangement will allow RadioShack to increase its footprint beyond its dealers. And what does HobbyTown get? RadioShack not only has brand recognition, but will also be bringing in its cell phone repair service which will add unique value to the store’s retail offerings.

According to the Post report, there is still a strong interest in the franchise model. Between that and the HobbyTown partnership it isn’t just nostalgia that’s keeping RadioShack going – many customers and, perhaps equally as important, partners are still finding value in the brand, products, and assets.

Read the whole story here.



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