Radio Shack hires investment banker to sure up finances
Despite hiring an investment baker, the retailer says it has sufficient liquidity and can pay down its debts. Just last week, CEO Joseph Magnacca said that the company doesn't need to score new financing immediately. In March, Radio Shack had $820 million in cash and credit. But with its credit rating at junk levels, the company is hoping to patch up its balance sheet for the credit agencies.
The recent shift to smartphone sales hasn't helped Radio Shack at all because of the competition in the business. In addition, margins on these devices are paper thin. Radio Shack has matched a now-expired deal from Best Buy that allows someone with an Apple iPhone 4 or Apple iPhone 4S in good condition, to trade it in for an Apple iPhone 5, signing a new two-year contract of course. Radio Shack finds itself trying to match deals offered by the major U.S. carriers, discounters like Walmart and big box stores like Best Buy.
Last year, Radio Shack lost $139 million and was another $43 million in the red during the first quarter if 2013. Second quarter results are due out on Tuesday. The stock on Friday closed down 8 cents to $3.07 on Friday.