Well, that was quick -- RadioShack has officially declared bankruptcy, and Sprint has announced plans to take over some of its stores, but not exactly as many as were expected.
Rather than acquire the retail storefronts outright, Sprint Corp. (NYSE: S) said Thursday afternoon that it would "expand its branded store distribution by approximately 1,750 stores" in partnership with RadioShack. The carrier is essentially leasing space in these RadioShack storefronts to form co-branded "store-in-stores" that will exclusively sell mobile devices across Sprint's brand portfolio, including Boost Mobile and Virgin Mobile USA Inc. (NYSE: VM), alongside RadioShack products, services and accessories.
Sprint CEO Marcelo Claure said in a statement that the pair will "benefit from operational efficiencies and by cross-marketing to each other's customers." Sprint will get one third of the retail space at each location, and RadioShack will get the rest. Sprint says it will be the primary brand on storefronts and in marketing materials.
On the carrier's third-quarter earnings call today, Claure stressed its need to expand distribution. Sprint currently has more than 1,000 company-owned retail stores, a number it says will more than double if the transaction is approved. Of course, it will be sharing mindshare with a bankrupt retailer, but it remains to be seen how that affects Sprint's reputation. (See Sprint, RadioShack Shack-Up Looks Inevitable .)
The companies expect the transaction to be finalized in the coming months, subject to approval by a Delaware bankruptcy court and to a closing period. Sprint's shares were trading up 24 cents -- or 5.24% -- to $4.82 after the deal was confirmed Thursday.
— Sarah Thomas, , Editorial Operations Director, Light Reading