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RadioShack Corp. is preparing for a bankruptcy filing and is in talks with Sprint Corp. to sell leases on some of its stores to the wireless carrier, Bloomberg News reported yesterday. The court restructuring would allow RadioShack to emerge with a leaner business after a migration of consumers to the Internet left it with 11 straight quarterly losses and depleted its cash. The company would file for bankruptcy protection as early as the first week of February. Under the developing plan, RadioShack would seek to complete a bankruptcy reorganization with 2,000 to 3,000 stores, compared with the more than 4,000 it has now. The company also has been reaching out to potential lenders for a loan that would finance its operations during court proceedings.

Wet Seal Inc. filed for chapter 11 protection yesterday, becoming the fourth apparel retailer to file for bankruptcy in two months, as the sector struggles with growing competition and a slowdown in spending among teen shoppers, Reuters reported yesterday. Wet Seal said in its bankruptcy filing that it received $20 million in debtor-in-possession financing from B. Riley Financial Inc., and intends to reorganize its business around e-commerce and its remaining 173 stores. The company, which sells apparel and accessories for teen girls and young women, laid off 3,700 employees and closed 338 stores last week. Wet Seal listed assets of $10 million-$50 million and liabilities of $100 million-$500 million, and hired FTI Consulting Inc. as a restructuring advisor, according to the filing.

RadioShack Corp. is preparing to file for bankruptcy protection as early as next month following a sputtering turnaround effort that left the electronics chain short on cash, the Wall Street Journal reported today. A filing could come in the first week of February, as the Fort Worth, Texas-based company has reached out to potential lenders who could help fund its operations during the process. Meanwhile, RadioShack is in talks with a private-equity firm that could buy its assets out of bankruptcy. The retailer, which employed 24,000 people late last year, has made clear it is running dangerously low on cash after posting losses in each of the last 11 quarters. Its stock-market value has fallen to less than $50 million.

Salus Capital Partners has offered RadioShack Corp. $500 million in bankruptcy financing, according to people familiar with the matter, a move that could increase the lender’s influence if the struggling retailer ends up in chapter 11, the Wall Street Journal reported today. RadioShack hasn’t said that it plans to seek bankruptcy protection, but the Fort Worth, Texas-based consumer electronics retailer is running out of cash after posting losses in each of the last 11 quarters. In September, it warned that it could be forced into bankruptcy court if it couldn’t raise new funds or get relief from lenders, including Salus, that are blocking its effort to close hundreds of stores. Salus’s unsolicited offer for a debtor-in-possession loan expires on Thursday. The new debt would replace a $585 million financing package the company first obtained in late 2013, some of which consists of credit lines dependent on the value of RadioShack assets.

Body Central is closing its chain of 265 clothing stores Sunday and is terminating 2,500 employees, the company said on Friday, marking the latest blow to the women's retail sector, Dow Jones Daily Bankruptcy Review reported today. The Jacksonville, Fla.-based company will liquidate through a state-court procedure called an "assignment for the benefit of creditors," which puts the company into the hands of an adviser who will work to pay off its debts. The company had hoped to restructure through a chapter 11 bankruptcy proceeding, according to its bankruptcy lawyer, Gardner Davis, but switched course "when the financing didn't materialize."

Teen retailer Wet Seal Inc. said yesterday that it is shutting two-thirds of its stores as it races to shore up liquidity and keep its operations afloat, MarketWatch.com reported yesterday. But it may be too late to avoid the fate of former rivals Delia’s and Deb Shops, which filed for bankruptcy protection in December. Already, a lender on some of the company’s senior convertible notes has issued a default notice with a deadline of Jan. 12. Unless Wet Seal meets its obligations or strikes a new agreement, the company is facing bankruptcy, said former bankruptcy attorney David Tawil of hedge fund Maglan Capital.

Teen fashion retailer Deb Shops on Wednesday won court approval to launch going-out-of-business sales that will culminate with the closing of nearly 300 stores, the Wall Street Journal reported today. An auction on Tuesday ended in a deal with liquidators Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC, which will sell off the final inventory, furniture, fixtures and equipment, said Laura Davis Jones, a lawyer for the company. Arguments between the company and the liquidators in advance of the auction ended with an agreement that the liquidators will pay 82 percent of the cost of the inventory on hand, down from the original 98.25 percent they offered. The decrease translates into about $7 million less for creditors of the dissolving retailer, according to Derek Pitts, a financial adviser to Deb Shops. Judge Kevin Gross approved the auction results at a hearing yesterday in the U.S. Bankruptcy Court in Wilmington, Del. Deb Shops sought chapter 11 protection in December.

Body Central Corp., a mall-based clothing retailer, is preparing a bankruptcy filing that could come within the next week, Bloomberg News reported yesterday. The company is working with the accounting and consulting firm Richter. Jacksonville, Fla.-based Body Central said yesterday that it received a notice of default on $18 million in debt and is assessing strategic alternatives. The company, which lost $70.2 million in the 12 months ended in September, is the latest seller of young women’s clothing to fight for survival. Shrinking foot traffic and encroachment by online sellers have put the squeeze on retailers that count on malls for their livelihood. Body Central, a four-decade-old chain that operates 265 stores in 28 states, had only $4.5 million in cash and equivalents as of Nov. 3.

Friendly's franchisee J&B Restaurant Partners of Long Island II LLC and certain affiliates filed for chapter 11 protection yesterday as part of a pre-negotiated restructuring plan, Reuters reported today. J&B said that the filing will allow it to close unprofitable restaurants, reduce debt and quickly emerge from bankruptcy. The owner of 37 Friendly's restaurants in New York, New Jersey and Connecticut expects to exit bankruptcy over the next six months and to remodel at least 11 restaurants over three years. The company said that GE Capital Franchise Finance will provide a debtor-in-possession financing to enable normal operation. J&B listed assets of about $500,000 to $1 million and liabilities of $10 million to $50 million.