Retailer Shopko enters Chapter 11 bankruptcy amid mounting debt
FBN’s Kristina Partsinevelos reports from the National Retail Expo in New York City.
Wisconsin-based retailer Shopko filed for Chapter 11 bankruptcy on Wednesday, citing a mounting debt load and “competitive pressures.”
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. Shopko will close an additional 38 underperforming store locations as part of the restructuring and attempt to sell its pharmacy business.
“This decision is a difficult, but necessary one,” Shopko CEO Russ Steinhorst said in a 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 disclosed in a court filing that it has already sold 82 pharmacy locations. It will also relocate more than 20 of its optical centers to freestanding locations.
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Shopko operates more than 300 stores in the U.S. It’s unclear how many of the company’s employees will be affected by the closures.
The filing came as several traditional retailers struggle to maintain store traffic amid a changing landscape. Toys R Us, Sears and Sports Authority have each declared bankruptcy in recent years.