RadioShack isn’t going out of business forever (yet), but instead may live on as a brand in co-branded stores with mobile provider Sprint. the electronics chain is holding liquidation sales in many of the stores they’re working to close. Yet at the same time that the company is preparing to shut about half of their stores, they’ve sought permission from the bankruptcy court to pay out about $3 million in bonuses.
This is all very normal for executives, of course, even at companies that are broke and shutting down. The Shack has been in trouble for some time, not turning a profit in two years and nine months. While it’s important to hold on to staff members who know what’s going on during massive transitions like this, Shack-watchers may question the decision to set aside money for retention and performance bonuses for a few dozen chain employees, including eight executives. Yet the chain thinks of this as an investment of sorts: by setting aside $30 million for bonuses, the company’s value is $30 million higher than it would have been without those executives in place. It just looks really, really bad: especially to the front-line customers who are dealing with liquidation sale vultures now and will lose their jobs in just a few weeks.
General GP, a major company shareholder, has announced plans to buy 1,400 to 2,500 RadioShack stores and run them as joint Sprint-RadioShack stores. Sprint had been looking to expand its real-life retail presence, and the Radio Shack brand could simply fade over time until it’s just the brand name on some batteries for sale in the corner of the Sprint store.
RadioShack Proposes Up to $3 Million in Bankruptcy Bonuses [Wall Street Journal]
by Laura Northrup via Consumerist
No comments:
Post a Comment