RadioShack: A Fallen Giant

RadioShack, the once renowned leading retailer with stores both locally and internationally selling all things electronics, has met upon hard times and today has palmed off its inventory and 1,743 stores to General Wireless Inc.

In a press report last month, Soo Huang Kim, Managing Partner of Standard General, the majority shareholder of General Wireless said, “This has admittedly been a difficult time for all RadioShack supporters.”

He noted that the transaction is an important milestone in the storied company’s history.

“It has allowed the company to shed stifling debts and unprofitable business lines. The new company has now been reorganized around a solid retail franchise underpinned by a world-class mobility carrier, Sprint Corporation (“Sprint”). It will now have the resources to fulfill its core mission of providing more than 1,200 communities across the country with first-rate service and high-quality, high-value electronics and accessories,” Kim continued.

At the time he also said,”We look forward to partnering with the company’s 7,500 associates, its landlords, and with Sprint to rebuild a great American company. In the coming weeks we plan to introduce our talented management team comprised of both new and continuing RadioShack executives. Finally, we would like to thank Joe Magnacca and the RadioShack Board of Directors for their tireless efforts and leadership throughout these challenging circumstances.”

That said, RadioShack is in a spot of bother as part of the assets that it is seeking sell off in the deal is its database of information pertaining to 117 million RadioShack customers, gleaned from mailing lists and service registrations.

The states of Texas and Tennessee have filed objections to prevent the sale of customer information. The states argued that multiple privacy policies from RadioShack promised users that their personal information would never be sold to a third party.

Apple is also voicing its objection on the basis that RadioShack database contains information about customers who bought iPhones and iPads in stores. And moreover, RadioShack signed an agreement that reflects the following in part:

“The Reseller Agreement between Apple and RadioShack protects information collected by RadioShack regarding purchasers of Apple products (the “Apple Customer Information”) and prohibits the proposed sale of such information.”

In addition, AT&T is joining in on the act of protesting the sale of customer information and argues that it has interest in RadioShack database as part of their agreement with RadioShack is the prohibition of sales of customer data.

RadioShack will learn its fate on these matters through the court on May 20.