RadioShack warns of possible bankruptcy

Associated Press

NEW YORK

RadioShack warned Thursday that it may need to file for Chapter 11 bankruptcy reorganization if it can’t rework its debt or find another way to ease a cash crunch.

The struggling retailer said in a regulatory filing that it is in talks with its lenders, bondholders, shareholders and landlords to fix its balance sheet, but if it can’t, it will try to file a prepackaged bankruptcy.

RadioShack, which is based in Fort Worth, Texas, has been working on turning around its business for the past 18 months. The company’s efforts have included cutting costs, renovating and closing stores, and shuffling management. It reported another quarterly loss Thursday on lower revenue.

CEO Joseph Magnacca said efforts to fix the company’s problems could include debt restructuring, closing more stores and other cost-cutting measures. He said the company is reviewing several alternatives, some of which would need consent from its lenders.

RadioShack is quickly running out of cash and warned Thursday that it doesn’t have enough left to fund its operations beyond the “very near term.”

The company reported $30.5 million in cash and cash equivalents on hand as of Aug. 2. That’s down from $179.8 million at the end of last year.