RadioShack says it may need to file for Chapter 11 bankruptcy reorganization if it can’t rework its debt or find another way to ease a cash crunch.
The struggling retailer said in a regulatory filing Thursday it is in talks with its lenders, bondholders, shareholders and landlords to fix its balance sheet, but if it can’t, it will try to file a prepackaged bankruptcy.
RadioShack, which is based in Fort Worth, Texas, has been working on turning around its business for the past 18 months. The company’s efforts have included cutting costs, renovating and closing stores, and shuffling management. It reported another quarterly loss on Thursday on lower revenue.
RadioShack has struggled to find its place in the evolving retail and technology landscape. It’s sought to remake itself, focusing on wireless devices and accessories, but growth in that business is slowing as more people have smartphones and see fewer reasons to upgrade. The company says it is working on becoming less dependent on its mobility business.
For its second quarter, RadioShack reported it lost $137.4 million, or $1.35 per share, for the period ended Aug. 2. That compares with a loss of $52.2 million, or 51 cents per share, a year ago.
Stripping out certain items, loss from continuing operations was $1 per share.Revenue dropped 22 percent to $673.8 million from $861.4 million.
Analysts surveyed by FactSet expected a loss of 66 cents per share on revenue of $735.9 million.
Sales at stores open at least a year declined 20 percent on softer traffic and the weak performance of the mobility business. This figure is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed.
THE ASSOCIATED PRESS