SIGNALS

It's 8 p.m. on a Saturday night. For reasons that really aren't worth explaining, you need to connect from a micro-USB port to a mini-USB cable. But where are you going to find a male-micro-USB-to-female-mini-USB cable? Of course, you head to Radio Shack. The kid there will sell you one. But, going forward, will a New York hedge fund sell one?

Radio Shack stores are a common sight in strip malls. For an incredible 94 years, the electronics retailer has been the go-to place for parts and gadgets. I would say that if you can't instantly tell me the location of the Radio Shack nearest to your home, you're not really a home-theater enthusiast. But times have changed. The number of customers building the Heathkit color TV have dwindled; the market for 2-pack 5k-ohm resistors isn't what it used to be.

Without belaboring the obvious, Radio Shack fell on hard times. Caught somewhere between modern devices that are thrown away rather than repaired, and zillions of retail stores that sell the only electronics that most people care about—cell phones, Radio Shack lost its way. Bankruptcy was inevitable and that happened in February. The only remaining question was liquidation or restructuring.

Many of the creditors favored liquidation. But in bankruptcy court, a federal judge ruled that Radio Shack should be sold to the biggest shareholder. And that is a hedge fund called Standard General LP. It will buy about 1,700 stores and run them in a co-branding arrangement with Sprint. At least for now, that saves some 7,500 jobs, but the future is far from clear.

The price to buy Radio Shack? $145.5 million—a pittance compared to the billions that are more typically tossed around in company buyouts. And what does $145.5 million buy? Basically, it appears, a corporate infrastructure to sell cell phone service. Parenthetically, a company called Spring Mobile, a subsidiary of GameStop, previously bought 160 stores, presumably also to sell cell phone service. Interestingly, intellectual property including the Radio Shack name and vast customer database, is still to be auctioned off by another creditor, Salus, which owns the IP.

And that's pretty much how things stand. At the start of the year, Radio Shack had 4,200 stores and assets of $1.2 billion. The problem, and why we are where we are now, is that the company also carried $1.38 billion in debt, and all the trend lines were heading in the wrong direction. So what will Standard General do with Radio Shack? No one really knows. It might buy the name, or have to invent a new name. Certainly, many stores will close; apparently the stores in small towns tend to be more profitable. The emphasis will probably be on cell phone chargers and things of that sort, and Sprint will have stores-within-the-stores. You probably won't find 2-packs of 5k-ohm resistors anymore.

Radio Shack will live on, but not really. Next time your Heathkit color TV loses its vertical hold, you're on your own.