If RadioShack (RSHCQ) does not succeed this holiday season it will likely go out of business.

In September, the struggling electronics retailer announced a $119 million second-quarter loss, and CEO Joseph Magnacca acknowledged the company could run out of money before it completes its turnaround plan:

While we are advancing on many fronts, we may need additional capital in order to complete our work. As a result, we are actively exploring options for overhauling our balance sheet and are in advanced discussions with a number of parties.  We are also working with our key financial stakeholders, including our existing lenders, bondholders, shareholders and landlords seeking to create a long-term solution. 

RadioShack subsequently reached a deal with a group of investors led by Standard General for emergency funds to get it through the holiday season, Reuters reported. The new investors become the lead lenders on the company's $585 million debt and loaned it another $120 million, which will convert to equity at some future point, according to the news service. The money allows the company to fund its holiday inventory needs, but it comes with conditions that show just how little leeway the chain has left.

In order for the loan to convert into equity rather than add to the company's already huge debt, RadioShack must deliver "changes to a supplier contract, at least $100 million in cash and borrowing capacity by Jan. 15, a financial plan for 2016 meeting certain requirements, and the completion of a rights offering of as much as 700 million shares," Reuters wrote.

That's a daunting task that goes from unlikely to impossible if RadioShack has a lousy fourth quarter and holiday season.

New products are part of RadioShack's plan for the holidays and beyond. Source: RadioShack. 

What's the holiday plan?
Like all retailers, RadioShack has big plans for the holiday shopping season, and it plans to kick them off at 8 a.m. Thanksgiving Day. That sounds like a good idea in theory, as it will give the store a jump on retail competitors including Best Buy (BBY -0.78%) (5 p.m.), Wal-Mart (WMT -0.32%) 6 p.m.), Target (TGT 0.33%) (6 p.m.), and Toys R Us (5 p.m.). But, in practice, it's likely to be wasted effort thanks to excess salaries paid out and lots of stores packed with merchandise, but not customers.

RadioShack is not a destination. Its stores are tiny compared to its big-box rivals. Its traffic has always come from being in busy retail locations and, in days now past, from people who need a cable. battery, or connector not sold at a pharmacy or convenience store. Black Friday is partly about savings, but it's also partly about the experience and getting up early to browse the shelves at a chain whose stores average 2,426 square feet. 
 
The deals aren't that special, either 
RadioShack might persuade people get up early to visit its tiny stores if it offered tremendous deals. Its offers, however, mostly center around products that aren't likely to have people showing up early
or even move the needle much later in the day when malls and shopping centers are packed. 

The company's best deal for name value/price might be its offer of $100 off Beats Solo HD Drenched in Color headphones. That brings the price of the headphones down to $69.99, but the deal comes from "instant savings and mail-in rebate," an extra step many will want to avoid. The other deals highlighted in a press release are a grab bag of off-brands and "I'm not sure how much that costs anyways" items, including:

  • The Nobis 7" 8GB Quad-Core Tablet with matching case for  $49.99 (save 50%)
  • SanDisk 16GB USB Flash Drive, priced at $4.99 (reg. $29.99)
  • Save 50% on JBL J55a On-ear Headphones, priced at $29.99 (reg.$59.99)
  • Get 50% off Incipio OFFGRID Backup Battery Case for iPhone 5/5s, priced at only $39.99
  • RC Surveyor Drone with Video Camera, priced at only $34.99 (reg. $69.99)
A Nobis tablet and a flash drive sold for slightly less than a similar nonsale 16GB drive on Amazon.com seem unlikely to help the company reverse its sales woes. The lineup of holiday sale items is much longer than this list, which were the goods highlighted in the press release, but the rest are equally lackluster.
 
The end is near
Magnacca has announced some interesting concepts for reimagining RadioShack, but, if he needs a successful holiday to implement them, he's not likely to get that far. The chain, despite some rebranding efforts, is still known to too many consumers as the place to buy an HDMI cable if you really can't wait until Amazon sends one at a much cheaper price. 
 
Opening early on Thanksgiving is a bold move, but doing so without a store packed with low-priced items desirable enough to bring customers in makes it a wasted effort. Sadly, RadioShack will spend the holiday shopping season in the same fashion as it has in recent years -- as another store people visit after they grow tired of the big boxes. It might sell you a stocking stuffer, an accessory, or even the occasional big-ticket item, but it's hard to see how RadioShack has done enough to change its fate.