RadioShack Bankruptcy Math: The Better-Known Your Company Is, The Less Its Name Is Worth

Image courtesy of (Phillip Pessar)

Bids are due tomorrow in the auction for RadioShack’s intellectual property. Consumerist has ultimately decided not to offer twenty bucks for TheShack.com, but we’re still following the auction with interest. Mostly, we’re wondering who is interested in the big prize: the right to call oneself “RadioShack.”

The company’s leases, stores, and fixtures have all been liquidated and sold to the Sprint/Standard General partnership or to competitor GameStop, which will use the spaces to open mobile phone stores, not GameStops. Standard General has the right to use the RadioShack name for six months, and doesn’t seem all that worried about holding on to the brand. Bloomberg Businessweek speculates that other possible buyers could be electronics brands based in Asia that aren’t yet known in the United States, but could use the built-in name recognition to at least have people look at their products.

Dead brands don’t have a very long shelf life, especially if they didn’t have a lot of public goodwill to begin with. Circuit City sold its name to Systemax/TigerDirect in 2009, and that company gave up on trying to market anything under the Circuit City name under four years later. “There’s kind of a funny smell for any brand that goes through bankruptcy, unless it’s relatively unknown,” a restructuring expert explained to Bloomberg Businessweek. Yes, this is precisely backwards: the value of a bankrupt company goes up if fewer people have heard of you.

RadioShack is a very well known brand in this country, but it’s not known for being a place where hip and intelligent people go to buy their consumer electronics. The company’s long decline led to its demise, and makes its assets less valuable in the afterlife.

Here is a poetic URL that whoever buys the brand name will end up with, purchased during the company’s ill-fated comeback last year.

The Shack didn't come back.

The Shack didn’t come back.

RadioShack Schedule of Assets [Hilco Streambank]
http://www.bloomberg.com/news/articles/2015-05-05/the-sad-tranished-afterlife-of-radioshack-s-name [Bloomberg]