Radio Shack Brand Sold to Hedge Fund for $26 Million

'That ain't workin,' that's the way you do it, money for nothin...' So sang the band Dire Straits 30 years ago about the enhanced value of projecting a song on the then-revolutionary media platform offered by MTV.

Some of the band's other lyrics sparked controversy, but when it came to anticipating the exponential growth possible through media convergence they were ahead of their time.

Radio Shack, another 'dead brand' from the early days of electronics retailing, has just sold its name and related intellectual capital for approximately 20% of the value of the 1,700 store locations it sold earlier. Money for nothing? We'll see which of those two asset classes ends up producing the better return. JL

Dawn McCarty reports in Bloomberg:

RadioShack said the information it was selling included 8.5 million e-mail addresses, 67 million customer name and physical address files, and transaction data. The proposed sale of customer information drew objections from 37 state attorneys general, who expressed concern about how a buyer might use the data
The dismantling of RadioShack Corp. grew closer to completion with the auctioning of the 94-year-old electronics retailer’s name to hedge fund Standard General LP for $26.2 million.
Standard General, which bought hundreds of RadioShack store leases in March, prevailed this week in the bidding for the bankrupt chain’s brand name, a trove of customer data and other intellectual property, the hedge fund said Wednesday.
Any transaction is subject to approval by the court in Wilmington, Delaware, where the bankruptcy was filed in February. A sale-approval hearing for the name is set for May 20.
RadioShack entered bankruptcy after struggling to compete with big-box retailers and online merchants. It has since been pursuing a plan to have a Standard General affiliate take over hundreds of stores in a co-branding arrangement with Sprint Corp.
Standard General won the store auction in March with a bid worth about $145.5 million for 1,700 of the chain’s 4,000 locations.

Latin America

Fort Worth, Texas-based RadioShack has also sold operations in Mexico and trademarks for the Middle East and South and Central America. Real estate, including three distribution centers, will be auctioned on June 11.
The proposed sale of customer information that the chain has collected over the years drew objections from 37 state attorneys general, who expressed concern about how a potential buyer might use the data and exactly what information was being sold.
RadioShack and Standard General will mediate with the states to resolve their concerns. That mediation is set to begin Thursday before Leif M. Clark, a retired U.S. bankruptcy judge in Texas.
“The firm has been working with the state attorneys general to ensure that the customer data is protected,” Standard General said in an e-mailed statement.
RadioShack said this month that the information it was selling included 8.5 million e-mail addresses, 67 million complete customer name and physical address files, and certain transaction data. It wasn’t selling any credit or debit card numbers.
The company also said that the databases don’t contain any sensitive information and that any references to wireless carriers and specific mobility products will be eliminated from the transaction data.
Standard General said it has committed to maintaining RadioShack’s strict privacy policies, which prohibit the sale of customer data. The firm also noted how competitive the auction was, which it said boosted its confidence in the value of the RadioShack brand.