Less than one week after RadioShack warned that bankruptcy could be imminent, the crippled electronics retailer has lost the person who was supposed to navigate the company through its stormy financial seas: its chief financial officer, John Feray, has jumped ship after less than a year in the position.
In a three-sentence statement released Monday morning, RadioShack announced that Feray resigned "for personal reasons" on September 12. Holly Etlin, a managing director of AlixPartners and longtime RadioShack advisor, will serve as the company's interim CFO. It's a familiar role for Etlin; she served as interim CFO from July 2013 until February of this year, when Feray took the reins.
Feray's appointment to the CFO position was announced less than a year ago, in January 2014. Feray, who came to RadioShack from Dollar General, where he served as senior vice president of finance and strategy, said at the time, "I look forward to working with Joe and the entire RadioShack team on the transformation of this iconic American retailer. I believe my experience at Dollar General is directly applicable to RadioShack and I am delighted to have the opportunity to help the company accomplish the turnaround plan that is underway."
His resignation comes at a time when RadioShack's balance sheet is the most vulnerable it's ever been. Last week, the company warned in an SEC filing that:
"There can be no assurance that any of these [debt restructuring] efforts will be successful. Each of the foregoing alternatives may have materially adverse effects on our business and on the market price of our securities. In the event the restructuring alternatives described above are not achievable, we would likely be required to liquidate under Chapter 7 of the Bankruptcy Code.”
And on Friday, Fitch Ratings downgraded RadioShack's long-term issuer default rating from CC to C, with the ratings agency noting that it "believes there will be a funding shortfall going into the holiday season." Fitch also said that an upgrade to RadioShack's rating is unlikely because it doesn't see any catalysts for a turnaround in business and that, in its view, "RadioShack does not have material sources of liquidity beyond its revolver as virtually all of its assets have been pledged to its credit facilities."
Following the announcement of Feray's resignation, shares of RadioShack surged more than 20% -- though, in a stock that closes at 91 cents, a gain of that magnitude translates to just 20 cents per share.
