Thursday’s bankruptcy by RadioShack may have opened the door to new Sprint stores, but it also may catch the wireless carrier short.
RadioShack owed Sprint more than $6 million, according to its filing in U.S. Bankruptcy Court in Delaware. It’s nothing to sneeze at, but it’s unlikely to cause much real pain to Overland Park-based Sprint, whose revenues reach about $3 billion a month.
Other telecom businesses were listed among RadioShack’s large unsecured lenders. Verizon Wireless is owed $2.85 million, Magic Jack $1.34 million and Tracfone Wireless $1.09 million, among others.
The companies were listed as owed repayment of trade debt, essentially when one company allows the other to run a tab on equipment or services.
RadioShack’s unpaid tab at Sprint ranked second largest among its unsecured debts, behind only the much larger $329.7 million owed to its bank, Wilmington Trust.
Investors following Sprint’s fortunes will be waiting for the list of which RadioShack store locations it will be able slap Sprint signs on. Sprint said Thursday it will gain space inside up to 1,750 of RadioShack’s roughly 4,000 stores in a shared-space deal with the consumer electronics retailer.
It will mark a major expansion of Sprint’s current retail footprint that chief executive Marcelo Claure put at 3,100 stores, including 1,100 that Sprint owns.
Sprint’s brand will be foremost on the stores with RadioShack. Inside, Sprint employees will offer Sprint, Virgin and Boost products and services in a third of each store’s space. RadioShack products will be available in the remaining space.
Analyst Jennifer Fritzsche at Wells Fargo Securities said the expansion of Sprint’s retail presence fills a need to give shoppers “a better touch point.” It needs one as rival Verizon and AT&T stores “become more technology centers,” Fritzsche said in a note to clients.
Expanding Sprint’s store count also aims for “the higher credit segment,” Fritzsche said, by which she meant wireless customers that tend to pay the largest bills each month. Sprint lost about 2 million of these valuable customers last year.