US Electronics Chain Radioshack Pulls Plug
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BUSINESS SATURDAY, FEBRUARY 7, 2015 Gulf producers grab market share in Asia SINGAPORE: Saudi Arabia’s move to slash the price it million barrels per day (bpd) between December and tial recovery from six-year lows last week. charges in Asia for its oil this week to the lowest in January, with the market share improving to 53.9 The increase in shipments has come mostly at the more than a decade is the latest aggressive action by percent from 52.2 percent in December, according to expense of producers such as Nigeria, Angola and Gulf states to defend market share in the world’s top estimates by Thomson Reuters Oil Research and Venezuela - and to a lesser extent Colombia and oil consuming region. Forecasts. Brazil - which in recent years have boosted exports to A price war between producers has raged since “The Gulf states seem to be in this for the long Asia after U.S. import requirements were curbed by Saudi Arabia and its Gulf OPEC allies last November haul. I think they will continue to make their crude the shale boom. chose to keep their taps open in a bid for market competitive regardless of what happens in the mar- Shipments from West Africa to China fell around 6 share over price, sending oil prices down more than a ket,” said Richard Gorry, managing director of energy percent in January, while those from Latin America third to under $50 a barrel in just two months. consultancy JBC Asia. dipped 9 percent, the data shows. Saudi Arabia cut Since then, Gulf producers - including Saudi Saudi exports to China rose by 13 percent in its monthly oil prices on Thursday for Asian buyers to Arabia and the United Arab Emirates - have steadily January from the previous month, as the Asian coun- the lowest in at least 12 years, while raising prices to increased shipments to Asia, helped by low produc- try took advantage of low prices to stockpile, Reuters Europe and the United States. tion costs that allow aggressive discounts, at the data shows. Asia is the only major consuming region in which expense of West African and Latin American supplies. Oil prices began tumbling in June 2014 when the Gulf dominates supplies. In Europe, Russia is the Middle East exports to China, by far the region’s traders reacted to rising output around the world at a biggest supplier while the shale boom has sharply biggest importer, increased 2.5 percent to around 3.8 time of slowing demand, though have staged a par- reduced US import needs. — Reuters Wage cuts and discounts as Swiss firms respond US electronics chain to franc strength ZURICH: Swiss companies are cutting prices, asking suppli- RadioShack pulls plug ers for discounts, paying staff in euros and demanding new hours to protect profits from a soaring franc currency. The central bank last month abandoned its cap on the Swiss franc, causing the currency to strengthen and Sprint to take over some stores prompting firms across Switzerland to warn of a plunge in profits. The 1.20-per-euro cap had protected the export- NEW YORK: Electronics retailer reliant economy from the effects of a strong currency since RadioShack Corp filed for US bankruptcy 2011. protection on Thursday and said it had a “We did the math, and would have gone into the red deal in place to sell as many as 2,400 stores from normal profitable numbers this year if we hadn’t done to an affiliate of hedge fund Standard anything,” said Adrian Fuchser, the head of Schneeberger General, its lender and largest shareholder. AG Lineartechnik, a maker of precision machinery. Wireless company Sprint Corp would The small family-owned firm of 230 employees is typical operate as many as 1,750 of those stores of one whose products became far more expensive to euro under an agreement with Standard zone customers overnight. Ripples of the currency cap General, Sprint said separately. removal are expected to spread in the coming months, RadioShack’s bankruptcy, which has from the tourism sector that took an instant hit, to banking been expected for months, follows 11 con- and engineering. secutive unprofitable quarters as the com- Some think tanks such as the KOF Swiss Economic pany has failed to transform itself into a Institute have warned that the move economy could tip the destination for mobile phone buyers. But economy into recession this year, with exports sliding and its sale agreement with Standard General the unemployment rate rising to 3.4 percent - still low in could spare it the fate most retailers suffer comparison with the rest of Europe. in Chapter 11, liquidation. RadioShack said in a statement that the CREATIVE APPROACH Standard General affiliate, called General Analysts estimate that most global players on the Swiss Wireless, would acquire between 1,500 blue-chip index will be spared a major hit from the strong and 2,400 of its 4,100 stores. franc because their global footprint means their sales and Sprint would occupy about one-third of costs are spread out over a variety of currencies. But small- each RadioShack store, selling “mobile and medium-sized companies have fewer natural defences. devices across Sprint’s brand portfolio as DALLAS: Maxine Simons walks out of the RadioShack store on Mockingbird Schneeberger’s Fuchser said he had no choice but to well as RadioShack products, services and Lane in Dallas on Thursday. The struggling electronics retailer has filed for respond aggressively to the central bank’s decision. Based accessories,” Sprint said in its statement. Chapter 11 bankruptcy protection and says it will sell up to 2,400 stores. — AP in Roggwil, roughly 70 kilometres west of Zurich, the com- Other potential buyers will also have pany draws the majority of its supply in Swiss francs, but the opportunity to bid on RadioShack The Standard General deal is only a bankruptcy include Loehmann’s Inc and sells roughly 40 percent into the euro zone. assets. Any deal will need approval by the piece of its restructuring efforts. Borders Group, which were sold to liquida- It has cut prices by 12 percent to keep its clients and is U.S. Bankruptcy Court in Delaware, so RadioShack has a deal with liquidation firm tion firms, and Coldwater Creek. seeking similar discounts from suppliers. Also, it is asking nothing is etched in stone. Hilco to shutter as many as 2,100 under- RadioShack over the past year tried to staff to work 42 hours a week instead of 40, effectively cut- Sprint’s chief executive, Marcelo Claure, performing stores and said it has already avoid bankruptcy by closing 400 stores ting wages, and will cut temporary jobs, Fuchser said. in a statement said the deal will “allow begun discussions with other potential and reducing workforce by 19 percent, Other companies are getting similarly creative. Dental Sprint to grow branded distribution quick- buyers to acquire the rest of its assets. court documents show. It changed its logo, implant maker Straumann has asked employees who com- ly and cost effectively.” “These steps are the culmination of a reduced store clutter and tried to connect mute from Germany or France to accept payment of their In an interview with Reuters earlier on thorough process intended to drive maxi- with tech-savvy shoppers through brighter salaries in euros instead of francs. Thursday, Claure said RadioShack had mum value for our stakeholders,” “concept stores” featuring interactive dis- Nearly 289,000 people work in Switzerland but live in “incredible store locations,” and he was RadioShack Chief Executive Joe Magnacca plays. neighbouring countries such as Germany, France and Italy. keen to acquire some to cut down on long said in the statement. But as the company’s public struggles Straumann is also cutting bonuses for Swiss-based staff waits at Sprint’s current stores. “Customers The chain’s more than 1,000 dealer went on, vendors lost confidence, and is asking some of its suppliers to cut prices and invoice have to wait one or two hours to get a franchise stores, its Mexican subsidiary and RadioShack’s chief financial officer, Carlin in euros instead of francs. phone and that’s not acceptable,” Claure its Asian operations are not part of the Adrianopoli, said in a court statement on “We want to convince our suppliers that they should car- said. A spokesman for Standard General bankruptcy, it said. Thursday. ry the currency risk. That will make us better prepared for did not respond to a request for comment. “RadioShack’s operating losses have situations like what we’ve seen in the past few weeks,” said RETAIL BLUES been well documented, which has caused Chief Executive Marco Gadola. RESTRUCTURING MOVES Fort Worth, Texas-based RadioShack, a many vendors to alter their relationships Private bank Julius Baer, which analysts estimate gener- RadioShack, with 21,000 employees, 95-year-old company that began as a mail- with the company,” Adrianopoli said. ates about 60 percent of its costs in francs while more than $1.2 billion of assets and $1.39 billion of order radio service, hopes to avoid liquida- RadioShack had hoped to ramp up store 80 percent of its revenues are in other currencies, debts according to court papers, said it tion, the fate many bankrupt retailers suf- closures but butted heads with lenders announced plans this week to cut about 200 jobs in also has an agreement with a lender group fer due to laws that give them little time to who would not agree unless RadioShack response to the SNB decision. — Reuters led by DW Partners for a $285 million loan decide whether to keep or break leases.