As Green Bay-based retailer Shopko spins toward financial oblivion and liquidation, 16 stores in Wisconsin will be closed. On Wednesday the regional retailer filed for bankruptcy.
The company seeks to restructure as a result of excess debt and competitive pressures. The petitions have been filed in the U.S. Bankruptcy Court for the District of Nebraska. During the restructuring process, Shopko will continue to operate and serve its customers, vendors, partners and employees, the company said in a press release.
For the moment the Racine store, 4801 Washington Ave., and the Kenosha store, 5300 52nd St., remain open. The company has operated stores under the Shopko, Hometown and Shopko Express names.
The company was already in the process of closing more than 60 stores when it added 38 more store closures with its bankruptcy announcement. Shopko has not announced how many of its 18,000 employees might be affected by the closures.
Shopko said it will relocate about 20 optical centers to freestanding sites. It is conducting an auction for its pharmacy business, it said in a news release.
The company has arranged for up to $480 million in financing from a group of lenders led by Wells Fargo Bank that will let it continue operating, Shopko said.
‘Difficult but necessary’
“This decision is a difficult, but necessary one,” Russ Steinhorst, Shopko’s CEO, explained in the statement. “In a challenging retail environment, we have had to make some very tough choices, but we are confident that by operating a smaller and more focused store footprint, we will be able to build a stronger Shopko that will better serve our customers, vendors, employees and other stakeholders through this process.”
The company was purchased by Sun Capital Partners, a private-equity firm, for about $1.1 billion in 2005. It had operated 363 stores in 24 states under varying formats.
Founded in 1962, Shopko went public in 1991. It generated $3 billion a year in revenue in 2017.