We are in no way surprised to hear of the bankruptcy filing by retailer RadioShack. It was something that many saw coming for several months, if not years. What will be quite fascinating to watch over the next year or so is to see how thing shake out with this backruptcy. In particular, there are issues with branding and franchising that will continue for some time.
On the branding front, as mentioned in this USA Today story, despite the bankruptcy the RadioShack name still holds tremendous value. As we note in our Product Decision tutorial, the monetary worth of a famous brand, such as RadioShack, may be quite substantial, possibly in the several million dollar range. There is no doubt some company or investor will want to purchase this name and continue to use it in some fashion. We have seen this many times with other well-known brand names that went out of business.
The second issue to watch is what happens with retail outlets operating as RadioShack franchises. According to this CNN Money story, up to 1,000 of the 5,000 stores operating under the RadioShack name around the world are independently owned franchises. Moreover, a large number of these stores are doing quite well. While it would appear bankruptcy will dissolve any franchise agreement, these stores could still survive under a different name. Alternatively, maybe, they could purchase the RadioShack trademark name and continue on.