As bankruptcy looms for RadioShack, we ask its chief financial officer... oh. He's quit
Troubled retailer may not last 'beyond the very near term'
The chief financial officer of struggling US electronics retailer RadioShack has resigned – as the company faces a fiscal crisis from which it has warned it may not be able to recover.
John Feray, who had served as RadioShack's CFO for nine months, stepped down on September 12, a new filing with the Securities and Exchange Commission reveals.
That would be one day after the company released its latest 10-Q quarterly report to the SEC, in which it warned that drastic measures may be needed if it is to weather its crisis.
"We have experienced losses for the past two years that continued to accelerate into the second quarter of fiscal 2015, primarily attributed to a prolonged downturn in our business," the report bluntly stated.
RadioShack posted an operating loss of $200.4m for the 26 weeks that ended on August 2, 2014, compared to a loss of $61.4m for the six months that ended on July 31, 2013.
The company began life of as a retailer of "ham" radio equipment, electronics supplies, amplifiers, speakers, and the like, then branched out into personal computers in the 1970s with its fondly remembered TRS-80.
As the market for its earlier product lines softened, however, more recently it has concentrated on selling mobile phones. But aggressive price competition and marketing by the wireless carriers has left RadioShack struggling to stay afloat, and it has warned that it risks becoming insolvent.
The company said it is considering various options, including seeking a recapitalization and investment agreement, selling the company outright, and various debt restructuring offerings, but that even these may not be enough to keep its doors open.
"If acceptable terms of a sale or partnership or out-of court restructuring cannot be accomplished, we may not have enough cash and working capital to fund our operations beyond the very near term, which raises substantial doubt about our ability to continue as a going concern," RadioShack's quarterly report stated.
That would mean bankruptcy, it said – either under Chapter 11 of the US Bankruptcy Code, which would allow it to restructure its debts and continue operations, or under Chapter 7, under which it would cease operations and its assets would be liquidated by a trustee.
Whatever measures RadioShack pursues, however, Feray won't be the one to oversee them.
In his place, the company has appointed Holly Felder Etlin, a managing director of consulting firm AlixPartners, as interim CFO. Etlin has worked extensively with RadioShack in the past and served as its CFO prior to Feray's appointment. ®