RadioShack Wants to Close More Than a Thousand Stores

The plan creates tension in court as lenders say they will not allow the company to close a quarter of the entire chain.
4:47 | 04/17/14

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Transcript for RadioShack Wants to Close More Than a Thousand Stores
Modern -- April 17 the markets in new Yorker open in today's big number. 1100. That's how many stores RadioShack would like to close but it's facing. Tough position. As the consumer electronics giant has been struggling to make a -- hello everyone I'm Michelle Franzen in New York here to break it all down Jeff MacKey. From Yahoo! finance -- Jeff give me an idea long and storied past with RadioShack what's the deal now. Well the company is trying to turn itself around which has been the case for about fifteen odd years. It's been -- curious. Few months form lately they ran those ads I don't remember them whether we're gonna revamp all the stores in the eighties called -- your store back today they announced the whole big thing -- -- gonna do. To revamp their stores took back involved closing a bunch of their existing stores as they were moth -- and just kind of generally -- like the inside of a sleeping bag. Now all of the people who actually on the debt -- -- -- -- you can't close 11100 stores as much as you'd like to. You can't do that without -- -- is so and so the two sides are locked in court. Fighting it out over the pickings of whatever is going to be left -- RadioShack finally does. Go ahead and close these stores wants to get rid of -- much as a quarter of the entire chain. The problem Michelle is that this little argument risks losing 100% of the chain. While the people fight over scraps give me an idea what lenders what they have a problem with about this plan why they're not accepting. Well as part of their contract they've -- RadioShack only close 200 stores -- the understates the problem they have. Is they just want to get paid back and and they are saying quite rightly so you don't we gave -- these loans yet 4300 stores you were allowed to close a certain number within that. But if you're gonna -- major restructuring plans and -- a quarter of your stores counts as one. They want to say and it and what they want a fight over is. Who gets to divvy up -- liquidity value of all that merchandise all that stuff they have in our stores it's not selling to customers at those locations but that doesn't make it worthless. So yeah I'm fighting over those rights a cost money to leave shopping malls to get out of those agreements. You got the -- fighting over about basically there's -- -- war and what it means for the shareholders is they are last in line for whatever laughed. It seems like RadioShack has had sort -- they're in limbo right now and don't they also have an identity problem here -- consumer electronics business that we've passed -- by. It has little bit and they've tried so many different things for very long time. But ultimately it has passed -- by they've just kind of missed the window and -- behind that speaker wire those remote controlled cars and follows little things. And they just have been able to find -- mediation and at what -- few years ago oblivious started trying to become the kind of cellular phone stores that didn't work out -- they just a bunch of problems in the might not be an answer here. The company is actually doing what they can revitalize in the stores the right idea closing a non performing source that make sense. But sometimes these things are just getting him -- circle of life companies are born they live they die. RadioShack is looking very much on life support so where do those negotiations with lenders go from here as are some sort timeframe or is -- just like -- hopefully out. Well you know somebody's under the raiders have lost 191 million dollars last year in the holiday quarter and so. From some of the -- perspective it RadioShack might be worth more dead than alive and I just say this and operationally. It cost you more -- keep these stores open and it doesn't just say try to sell anything albums of one I would just doubt erupt all these goods all these fax machines and -- five things -- avenue stores. We'll sell money day or sell the subways -- liquidated and another manner. That would make RadioShack worth more dead than alive which is really too bad this seems to be added the stock was at one point 75 dollars had a fifteen billion dollar market cap. -- by the entire chain for 200 million and you'd still be getting ripped off they have -- 4300 stores they're proposing to close at least 11100 of them and they make it. Whether they close these stores or not. Probably not it -- it's really -- sometimes your breast chances they hail Mary pass right it's low percentage. They don't have that big -- chance of survival if everything falls their way and the longer they spent in court fighting over these type of little operational issues. The worst their chances get so by the time of this argument goes opportune three months. RadioShack may be -- -- down to -- in 2000 stores and it is just a loss of jobs to really sad and -- this RadioShack story. But it's getting harder and harder to see a way that this thing can win. Jeff MacKey from Yahoo! finance thanks for joining us and for clarifying all that you of course can keep up with the latest headlines right here on Even watching the big number I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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