Boston, MA 04/22/2014 (wallstreetpr) – RadioShack Corporation (NYSE:RSH) is a $146 million consumer electronics retailer. The company mainly operates brick-and-mortar stores although it also has a presence online. It also operates stores in Malaysia and China. Like most other brick-and-mortar retailers, the company is faced with a challenging business environment as sales decline as expenses increase.
The company can be seen trying to manage a turnaround but challenges and time are complicating matters. Tension can also be seen building up between the company and its lenders following recent announcements.
RadioShack Corporation (NYSE:RSH) announced plans to close about 1,100 stores, yet the company is only allowed to close 200 stores without seeking the approval of its lead lenders that are GE Capital and Salus Capital Partners.
The issue over the announcement is that the struggling retailer went public about its plans to close more stores without first seeking approval of the lenders. RadioShack Corporation (NYSE:RSH) operates about 4,300 stores across the U.S. and it is trying to reduce its location presence efforts to achieve a quick turnaround.
Seeking approval for stores closure
Although the company announced plans to close more stores than previously agreed, it said that a permission from the lenders will be required to implement the plan. As such, the company hopes to spend the next few weeks to obtain approval from its lenders over the closure of more stores.
The negotiations between RadioShack Corporation (NYSE:RSH) and its lenders over the exact number of stores to be closed are expected to take time considering the tension that has already been created by the move by the retailer to go public with the plan without involving the lenders. It is also reported that more than 1,100 store could eventually be closed, according to sources.
A struggling business
RadioShack Corporation (NYSE:RSH) is faced with dwindling fortunes as traffic to the store reduce amid cutthroat competition from online rivals. Efforts by the company to price products competitive have done no good to its bottom line. Although a turnaround is possible, delays and the tension that is building up could lead to more pain for the struggling business.