General merchandise retailer Shopko, along with its subsidiaries, has filed a voluntary petition for Chapter 11 bankruptcy protection and now plans to close more than 100 stores as part of its reorganisation.
The company, which sells products including baby gear, toys and clothing, filed its petitions in the US Bankruptcy Court for the District of Nebraska and is seeking a court-supervised financial restructuring.
It has obtained up to US$480m debtor-in-possession (DIP) financing from a group of lenders, led by Wells Fargo, to help fund and protect its operations during the Chapter 11 process. This will ensure that suppliers and other business partners and vendors will be paid for goods and services provided during the Chapter 11 process, Shopko says, adding it will continue to operate and serve its customers, vendors, partners, and employees during the restructuring.
In addition, the company says it will close an additional 38 locations – taking the total number of stores due to be closed to 105 – relocate over 20 Optical centres to freestanding locations, and conduct an auction process for its pharmacy business.
“This decision is a difficult, but necessary one,” says CEO Russ Steinhorst. “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 Green Bay, Wisconsin based Shopko Stores Operating Co is a $3bn retailer that operates more than 360 stores.