RadioShack’s Last Hope for Survival: Shrinking Fast in Bankruptcy

RadioShack’s mission—to shrink like crazy—hasn’t been accomplished fast enough. The ailing electronics retailer said on Thursday that it may not be able to avoid bankruptcy. While still holding out hope for new financing, the company acknowledged it could run out of money soon (some analysts think this could happen within a month).

In the broadest sense, RadioShack’s problems are those of the retail industry. Buying gadgets on the Internet is usually cheaper and more convenient. Running a network of 4,000 stores isn’t cheap, and it’s hard to make the numbers work when same-store sales are dropping 20 percent per quarter. RadioShack’s phone-selling business has been hit particularly hard, because wireless carriers have been undercutting the retailer on price.