Shopko files for Chapter 11 bankruptcy
Shopko announced on Wednesday, January 16, 2019, that it has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. Chapter 11 allows a company to restructure its finances under court supervision.
In a release announcing the filing, Shopko said the restructuring is necessary because of “excess debt and ongoing competitive pressures.”
The company says its will continue to operate during the restructuring. It has secured $480 million financing to ensure that suppliers will continue to be paid during the restructuring process.
In the release, Shopko CEO Russ Steinhorst said, “This decision is a difficult, but necessary one. 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 the process.”
The company says it will close 38 stores, relocate 20 optical centers to freestanding locations, and auction off its pharmacy business. According to the list published on shopko.com there will be a total of 7 stores closing in South Dakota, The Rapid City Location is not on the list.
Last week, Shopko announced that it was closing its Shopko Hometown stores in Custer and Chamberlain.