Shopko files for bankruptcy protection, to close more stores

Andrew Cummings
January 18, 2019

The Green Bay, Wisconsin-based company filed for Chapter 11 bankruptcy protections Wednesday morning, generally citing poor sales numbers.

The company said it has obtained $480 million in financing from lenders, including Wells Fargo, in order to continue normal operations and pay its suppliers. A press release said that the company plans on closing 38 more stores.

As part of its efforts to improve its balance sheet and bolster its business, Shopko announced the closure of 39 underperforming stores last month - including its Greybull location.

The restructuring petitions have been filed in the U.S. Bankruptcy Court for the District of Nebraska.

It's likely that Shopko's optical business could remain in the city, as the company said it plans to relocate more than 20 Shopko Optical Centers to freestanding locations.

"This decision is a hard, but necessary one", Shopko CEO Russ Steinhorst, said in a news release.

Shopko operates more than 300 stores in the U.S. It's unclear how numerous company's employees will be affected by the closures.

The Powell Shopko is going to lose its pharmacy, as the store's corporate owners announced Wednesday that the chain is getting out of the pharmacy business. All Shopko Optical centers and pharmacies will remain open during the process. The pharmacies have been a big drain on Shopko, while the company's first freestanding optical centers that were opened a year ago turned in encouraging financial results.

A bright spot for Shopko is its optical business. The retailer operates more than 360 stores in 26 states throughout the Central, Western and Pacific Northwest regions.

Shopko is owned by Sun Capital Partners, which took the retailer private in 2005.

Shopko is also filing customary first-day motions that, once approved by the court, will allow it to smoothly transition its business into Chapter 11, including, among other things, granting authority to pay wages, salaries, benefits, and pay vendors and suppliers in the ordinary course for authorized goods and services provided on or after the filing date.

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