KUALA LUMPUR: Berjaya Corp Bhd (BCorp), which is controlled by billionaire Tan Sri Vincent Tan, may acquire the licence to use RadioShack’s trademark following news that the US electronics retailer had filed for bankruptcy protection last Thursday.
Berjaya RadioShack Sdn Bhd (BRadioShack) chief operating officer Yau Su Peng told The Edge Financial Daily that she does not discount the possibility of the group acquiring the RadioShack trademark from RadioShack Corp.
RadioShack Corp filed for Chapter 11 bankruptcy last week, which is expected to see it sell off up to 2,400 of its US stores. It reportedly had liabilities of US$1.39 billion as at Nov 1, 2014, and had failed to post a profit since 2011.
Yau said “this situation was not unexpected”, adding that steps to address any operational impact have been in place for the last few months.
In Malaysia, the RadioShack franchise is owned and managed by BRadioShack, a wholly-owned subsidiary of Berjaya Retail Bhd (BRetail), which in turn is a unit of BCorp (fundamental: 0.35; valuation: 1.2). A total of 13 RadioShack stores have been opened since its launch in September 2012, offering a wide selection of international brands within each product range as well as its proprietary brands such as RadioShack, Auvio, PointMobl and Gigaware.
The retail stores are in Mid Valley Megamall, Berjaya Times Square, Hartamas Shopping Centre, Bangsar Shopping Centre, Pavilion Kuala Lumpur and Avenue K in Kuala Lumpur, Sunway Pyramid in Subang Jaya, and Gurney Plaza in Penang, with five other stores in Borders outlets in Kuala Lumpur, Petaling Jaya and Penang, said Yau.
It is targeting to open a new outlet in Sunway Putra Mall in Kuala Lumpur this year, she added.
On March 22, 2012, BRetail and RadioShack Corp entered into a master development agreement to expand RadioShack’s global footprint across 10 Southeast Asian countries.
As a franchise developer, BRetail has sales and distribution rights to brands retailed by RadioShack, store rights, Internet selling rights and sub-franchising among other things.
Yau also said it’s “business as usual” at RadioShack stores in Malaysia despite the franchise owner filing for bankruptcy protection in the United States.
She said the ownership and management of the business in Malaysia comes under BRadioShack and not RadioShack Corp.
“Day-to-day operations have always been managed by a fully Malaysian team. It is business as usual. RadioShack Malaysia will continue to work with its present vendors and partners to bring quality personal electronics to tech-savvy Malaysians,” said Yau in an email reply to The Edge Financial Daily.
Yau also denied that RadioShack Malaysia faces financial problems like its counterpart in the US. She said BRadioShack is geared to continuing growing the business here, adding that it is far too early to speculate on any other actions.
RadioShack could be the second American trademark that Berjaya Group has acquired. The company acquired the Borders trademark from Borders Group Inc in October 2011.
BCorp acquired the licence to use Border’s trademark on a perpetual basis from the liquidators of Borders Group after the latter filed for bankruptcy.
Berjaya Books Sdn Bhd, the operator of Borders Malaysia, now owns the Borders trademark in perpetuity within Malaysia following the successful acquisition of the brand.
Although the amount to acquire Borders back then was never revealed by BCorp, it was reported that Barnes & Noble Inc had bid US$13.9 million to acquire intellectual property assets including the US trademark of Borders Group.
In a statement issued last Wednesday, BRadioShack said BRadioShack is a separate entity from RadioShack Corp, with an entirely separate profit and loss account that is accountable to BRetail.
“RadioShack Malaysia does not rely on RadioShack Corp and has its own arrangements in place with distributors worldwide for merchandise,” it said, adding that in the US, RadioShack Corp has seen financial losses which caused it to default in its debt settlement and it has been delisted from the New York Stock Exchange.
Apart from RadioShack, BRetail operates the 7-Eleven and Singer brands that have a combined network of 2,000 stores in the country.
A search of the Companies Commission of Malaysia registry of companies showed that BRadioShack’s net loss has widened to RM1.99 million for the financial year ended December 2013 (FY13) from RM570, 602.00 in FY12.
BCorp shares closed unchanged at 40.5 sen on Friday, bringing a market capitalisation of RM1.68 billion.
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This article first appeared in The Edge Financial Daily, on February 9, 2015.