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Green Bay-based retailer Shopko
has filed for Chapter 11 bankruptcy.
The company today announced plans for its financial restructuring, citing "excess debt and ongoing competitive pressures," according to a news release
Shopko operates 360 retail stores, including general merchandise stores, pharmacies, opticals and smaller-sized "hometown" stores, in 26 states throughout Central, Western and the Pacific Northwest regions of the U.S. Wisconsin is home to almost 80 Shopko stores.
As part of the restructuring, the retailer is currently in the process of closing a total of 107 stores, which includes 38 locations that were announced today in addition to 69 locations that were previously announced. The company posted a complete list on a website dedicated to the restructuring.
The wave of closures includes 15 Wisconsin stores, including stores in Grafton, Sussex, Manitowoc and West Bend, which will shutter in early-to-mid-April.
Shopko stores remaining open in southeastern Wisconsin are located in Mequon, Port Washington, Waukesha, Racine, Kenosha, Mayville, Sheboygan and Watertown.
"This decision is a difficult, but necessary one,” said Russ Steinhorst, chief executive officer. “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 is also in the process of selling its pharmacy business, which has under-performed due to "high inventory costs" from pharmaceutical provider McKesson Corporation, according to court filings.
Parts of the business have been purchased in recent months, but its remaining assets will be sold at an auction, set to take place Jan. 23.
A group of lenders, led by Wells Fargo, will provide $480 million in funding to help support Shopko's operations during its reorganization process. The funds will allow the company to continue paying suppliers, vendors and business partners.
Following the success of its four freestanding optical centers that opened in 2018, Shopko plans to relocate over 20 optical stores to freestanding locations and open additional freestanding optical locations later this year.
"Throughout this process, all Shopko Optical centers and pharmacies remain open and continue to deliver the high-quality products and services to which its customers are accustomed," according to the release. "All other stores remain open as the company continues to optimize its store footprint."