RadioShack May Close Half of its Retail Locations, Sell Other Half to Sprint [iOS Blog]

The end may be near for RadioShack retail stores after a dire September warning that the company would not be able to finance operations „beyond the very near term“ without a sale, investment, or company restructuring. According to Bloomberg, RadioShack may be planning to sell half of its stores to Sprint and close the other half in a move that would potentially see the termination of the RadioShack brand.

The locations sold to Sprint would operate under the wireless carrier’s name, meaning RadioShack would cease to exist as a stand-alone retailer, said the people, who declined to be identified because the talks aren’t public.

RadioShack was established in 1921 and flourished for many years, but in the early 2000s, the retail chain began seeing some decline in sales. In 2006, RadioShack closed 500 stores and laid off more than 400 employees in an effort to cut costs, but the brand has continued to struggle since that time as consumers have turned towards electronics stores like Best Buy and dedicated carrier stores from AT&T, Sprint, T-Mobile, Verizon, and more.

The company warned investors in September that it could be forced to file for bankruptcy protection, but RadioShack bankruptcy rumors have circulated since 2012, when RadioShack first began seeing major losses. A second consolidation was announced in 2013, with an additional 1,100 stores to be closed, but that move has since morphed into the liquidation plan to sell to Sprint or another company as RadioShack has continued to lose value over the course of the past year.

Terms are still being discussed between RadioShack and Sprint and Bloomberg warns that negotiations could break down or that plans could change. The two companies have discussed co-branding, and it’s still early enough in negotiations that another bidder could purchase RadioShack and keep the retail chain operational.




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RadioShack May Close Half of its Retail Locations, Sell Other Half to Sprint [iOS Blog]

GT Advanced COO: Apple Told Us ‘Put On Your Big Boy Pants and Accept the Agreement’

Apple and GT Advanced fought to keep key documents related to their sapphire agreement out of the public eye after the latter company filed for Chapter 11 Bankruptcy protection, but earlier this week, a judge ruled that the documents did not contain trade secrets or confidential information, and would thus be largely unsealed.

As of today, those previously sealed documents are now available for public inspection, including an unedited affidavit [PDF] from GT Advanced COO Daniel Squiller. Squiller submitted a revised affidavit on October 28, which gave some insight into the deal between Apple and GT Advanced, but the newly available unedited version expresses much stronger negative feelings towards the partnership and places more of the blame for GT’s failure on Apple.

According to Squiller, Apple used a „bait-and-switch“ strategy, offering GT Advanced „an onerous and massively one-sided deal“ in 2013. He says that Apple initially drew GT in with the promise of a huge deal, originally agreeing to purchase sapphire furnaces and let GT operate them, but eventually demanding a „fundamentally different deal“ requiring GT to purchase the furnaces itself.

The new structure, as a contract matter, shifted all economic risk to GTAT, because Apple would act as a lender and would have no obligation to purchase any sapphire furnaces, nor did it have any obligation to purchase any sapphire material produced by GTAT.

GT gave into Apple’s new terms because it had „invested months negotiating a sale contract with Apple while being effectively locked out of pursuing other opportunities with Apple’s competitors.“ During „extensive and all-consuming“ negotiations with Apple, GT ceased speaking to other companies about its furnaces due to the lure of Apple’s large offer.

Apple reportedly told GT not to bother attempting to negotiate because it „does not negotiate with its suppliers.“ GT was required to agree to all of Apple’s terms or risk losing the deal, and as has been previously noted, the contract was highly favorable to Apple, requiring GT to produce sapphire that Apple was not obligated to buy. Squiller alleges that when GT execs balked at the terms, Apple said „Put on your big boy pants and accept the agreement.“

As Squiller previously described, the company’s relationship with Apple became „unsustainable“ after Apple refused to take responsibility for cost overruns and expenses that it caused due to its control over operations. Apple also reportedly selected fabrication equipment that „could not economically produce a product that Apple would accept“ and then refused to permit equipment changes that would allow the company to produce an acceptable product.

Squiller accuses Apple of „embedding“ itself in GT’s operations so deeply that GT was forced to „divert an inordinate amount of its cash and corporate resources“ into the Mesa facility, affecting GT’s continued viability as a whole.

Apple and GT Advanced have already reached an agreement to officially end their partnership, nullifying the terms of the original deal. Under the terms, GT will repay its loans to Apple by selling off its sapphire furnaces, and it has already begun shutting down its Mesa, Arizona plant and laying off employees.




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GT Advanced COO: Apple Told Us ‘Put On Your Big Boy Pants and Accept the Agreement’