GameStop Corp (NYSE:GME) may sharply increase the number of its Spring Mobile stores after the company bid on Wednesday for the right to take 163 leases over from electronics retailer RadioShack Corp, which filed for bankruptcy this month.
The agreement allows GameStop to decide in about two months if it will take on the obligation of the RadioShack leases or terminate the lease, according to a filing in the U.S. Bankruptcy Court in Wilmington, Delaware.
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The video game retailer said it had agreed to pay $15,000 for each RadioShack store lease.
"We can confirm that GameStop has submitted a bid to acquire a select number of RadioShack's U.S. leases," said an email sent on Thursday from GameStop spokeswoman Jackie Smith. "If awarded these leases the locations would be primarily used to expand the retail footprint of our Spring Mobile business, which is an exclusive AT&T dealer."
On Friday, RadioShack will ask U.S. Bankruptcy Judge Brendan Shannon to approve the agreement with GameStop, which had 311 Spring Mobile stores as of its most recent quarterly regulatory filing in November. GameStop has focused on expanding Spring Mobile and Simply Mac, a retail chain which sells Apple products.
Despite the sale to GameStop, RadioShack largely came up empty at Wednesday's lease auction. The chain was selling leases to 1,100 stores that it is abandoning this month, and court documents showed only four other leases drew bidders.
RadioShack is planning an auction next month for about 2,000 stores that will remain open. Standard General, a hedge fund, has agreed to present an initial $200 million bid at the auction.
Another group of RadioShack stores will be abandoned in March, and those leases will also be auctioned.
Reporting by Tom Hals in Wilmington, Delaware, editing by G Crosse)