Shopko to close 250 more stores
Following a January Chapter 11 filing, Shopko is shuttering 251 stores on top of the 38 locations it previously announced would close.
Shopko will shut down the stores across its Shopko and Shopko Hometown banners in the states of Arizona, California, Colorado, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, North Dakota, Nebraska, Nevada, New Mexico, Ohio, Okahoma, Oregon, South Dakota, Texas, Utah, Washington, Wisconsin, and Wyoming.
“We remain hopeful that we will be able to emerge as a stronger company, and we believe that this is the best course of action to make ourselves more attractive to potential buyers and successfully emerge from Chapter 11,” Shopko spokesperson Michelle Hansen said in a statement.
Shopko was required to issue a Worker Adjustment and Retraining Notification Act (WARN) notice to affected employees in Wisconsin and Illinois due to the number of stores that will close in those states.
One bright spot for Shopko is its optical business. Encouraged by the performance of its four freestanding Optical centers that were opened in 2018, the retailer plans to continue to grow its optical business, opening additional freestanding Optical locations during 2019.
Founded in 1962 and based in Green Bay, Wisconsin, Shopko Stores Operating Co., was bought by Sun Capital in 2005 for about $1.1 billion. The retailer operates more than 360 stores in 26 states throughout the Central, Western and Pacific Northwest regions. Retail formats include 126 Shopko stores, providing quality name-brand merchandise, great values, pharmacy and optical services in small to mid-sized cities; five Shopko Express Rx stores, neighborhood drugstore concept; six Shopko Pharmacy locations; four Shopko Optical locations and 234 Shopko Hometown stores, a smaller concept store.
Shopko has obtained up to $480M debtor-in-possession financing from certain of its secured lenders, led by Wells Fargo, N.A. as administrative agent, to help fund and protect its operations during the Chapter 11 process. The retailer said suppliers and other business partners and vendors will be paid in a timely manner for authorized goods and services provided during the Chapter 11 process.
Shopko also filed customary first day motions that, once approved by the court, will allow the company 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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