Consumer electronics retailer RadioShack Corp. (RSH) said Monday that it will dissolve its mobile-phone partnership with discount-store operator Target Corp. (TGT), effective April 8, 2013.
RadioShack, which helps operate Target Mobile in 1,500 Target stores, said that the two companies were unable to agree to a new deal that would be profitable for both companies.
RadioShack noted that while the mobile partnership provided the company access to manage Target's post-paid mobility business, it did not enable the company to manage the prepaid mobility business or the wider range of accessories offered in Target stores.
Since October 2012, RadioShack had been renegotiating the terms of the partnership with Target to establish a new deal that would be profitable to both companies. At that time, RadioShack executed a termination notice that would allow the company to exit the deal with Target if the two companies could not agree to a new deal.
Telvin Jeffries, RadioShack executive vice president, chief human resources officer, and general manager of retail services said, "In order for RadioShack to have continued this relationship, we needed to establish a new agreement that would be financially appealing to both companies. Ultimately, we amicably agreed to dissolve the relationship."
In late October, RadioShack reported a loss for the third quarter amid a drop in sales, as the postpaid mobility business saw a continued decline in margins.
RSH closed Monday's trading at $2.31, up $0.09 or 4.05 percent on a volume of 4.57 million shares.
TGT closed trading at $60.39, up $0.32 or 0.53 percent on a volume of 4.44 million shares.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org