Amazon Looks To Buy RadioShack Locations
By Brianna Ahearn, contributing writer
As news of RadioShack closing its stores for good hit the business world, the question became what would become of the thousands of stores in the chain. Reports came that RadioShack was negotiating with Sprint to close half of its stores, and let Sprint take over the leases of the others. Now news comes that online retailer Amazon is considering taking over the Radio Shacks stores as well. Bloomberg and other news outlets began reporting February 3, 2015, that the internet shopping retailer is considering taking on the stores as a way to expand their physical locations. Currently RadioShack has more than 4,000 locations according to Bloomberg, and would sell a portion of those, closing the others, with Sprint possibly buying 1,300 to 2,000 of the 4,000 stores.
If Amazon does make a bid for the real estate alongside Sprint, Amazon acquiring the stores makes financial sense. Rather than having to build a new store completely, Amazon would be able to remodel the existing store structures, and move their own products into them. If the deal goes through and their bid is received, Amazon would be acquiring the stores to showcase their line of products, such as the Kindle, Fire Smartphone and Fire TV. The stores could also be a place for Amazon's customers to pick up their orders or make returns. Hundreds of RadioShack locations are in shopping malls throughout the United States, according to MallSeeker.com, and these stores could prove to be a good investment for Amazon. The investment group behind Brookstone is also said to be mulling purchasing the stores Bloomberg reports.
RadioShack was founded in 1921, and was a premium retail destination for early computer technology, however, in 2012, the company posted very low first quarter reports, and had their stock plummet. In March 2014, they announced they would be closing almost 20% of their stores, or 1,100 locations. However, the retailer had to scale back the closures, as they couldn't reach an agreement with lenders. By September 2014, RadioShack was said to be near filing bankruptcy, after their stock price fell as low as 55 cents in August, but underwent restructuring in October 2014. December 2014 saw the retailer rapidly losing cash, and reporting a loss of $161 million. The retailer saw increasing competition from Best Buy and Amazon, and now it seems Amazon could take up its lease.
RadioShack tried to show America they were ushering in a new age with cutting-edge technology, with a pricy Super Bowl advertisement depicting 1980's icons “taking back” the store. However, despite this new marketing campaign, and all of the cost-cutting efforts the retailer has made, RadioShack is nearing its end. If Amazon takes over the RadioShack leases, it will be the largest move the company has made into brick and mortar stores. Amazon has already tried kiosks in malls, and opened its first physical store this month in Indiana. The new brick and mortar store is a pickup and drop-off location at Purdue University. For now, the retail industry has to wait for the imminent bankruptcy filing, which could come as early as this week.