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Amazon To Buy Some RadioShack Locations?

In an attempt to shore up its emerging brick-and-mortar business, Amazon.com Inc. is in talks about acquiring some RadioShack Corp. locations after the electronics chain files for bankruptcy, two people with knowledge of the matter said according to Bloomberg.

RadioShack stores have been considered potentially strong locations to showcase the e-commerce giant’s hardware, as well as potential pickup and drop-off centers for online customers, said Bloomberg’s source.

If the deal goes through as RadioShack shuffles along to bankruptcy court, it would be Amazon’s biggest buy-in into traditional retail.

Amazon is not alone, however, in seeking to purchase the remains of RadioShack.  Sprint Corp. and the investment group behind Brookstone are evaluating RadioShack stores, people familiar with the situation said. The ailing electronics business has about 4,000 U.S. locations and is moving toward a deal to sell a portion and close the rest. Sprint has discussed buying 1,300 to 2,000, they said.

Representatives from Amazon, RadioShack and Brookstone declined to comment.

While there is no guarantee the deal will go through, if it were to pass muster, market-watchers are interested to see if this could help Amazon get onto a more equal footing with rival Apple. Amazon’s Kindle was a massive success, the Fire smartphone – not so much.  In fact, it tanked so hard that it contributed to a $170 million inventory writedown in the third quarter of last year.

Amazon, once burned but never shy, in November introduced the voice-activated Amazon Echo speaker that lets people stream music and add things to Amazon shopping lists.

RadioShack was born as a mail-order retailer for amateur ham-radio operators and maritime communications officers in 1921.  By the 1980s, it was the go-to shop for personal computers, gadgets and components that were hard to find elsewhere.  The digital age – ironically – has not been kind to RadioShack, and as of Monday (February 2) the New York Stock Exchange said it would suspend trading of the RadioShack stock immediately.

The exchange took the step after RadioShack failed to submit a business plan to address its non-compliance with NYSE rules. To list on the exchange, companies must have an average market value of at least $50 million for 30 straight days or shareholder equity of that amount – a bar RadioShack can not clear, having lost 90 percent of its share value in the last year.

 

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