ASHWAUBENON, Wis. (WLUK) -- Shopko has filed for bankruptcy -- and is closing 38 stores as part of its restructuring efforts.
The Ashwaubenon-based retailer announced Wednesday that it has obtained $480 million in financing from lenders led by Wells Fargo to fund and protect its operations while it goes through bankruptcy. Shopko has also asked the federal bankruptcy court in Nebraska to allow it to continue to pay wages, salaries and benefits, and pay vendors and suppliers during the bankruptcy process.
“This decision is a difficult, but necessary one,” CEO Russ Steinhorst said in a news release. “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.”
Court documents list the company's assets at between $500 million and $1 billion, with liabilities estimated between $1 billion and $10 billion.
A list of the 38 closing stores plus previously announced closures is posted on a special website dedicated to the bankruptcy. It includes seven stores in Northeast Wisconsin, all of which are set to close in April:
The closing of the company's original location on Military Avenue has some people worried the company may close for good and thousands of people would be unemployed.
Jim Golembeski, the Executive Director for the Bay Area Workforce Development Board said luckily there are more than 500 open positions at other area retailers.
"Some of this is how business evolves and changes. Some of this is that the retail sector there's a real earthquake happening with Amazon and Google and people being able to shop online," explained Golembeski. "I never want to disregard the fact that it's traumatic to lose a job at a place where you have familiarity, and you have friends and know your customers. But this isn't the great recession and people are stepping out into new opportunities," he said.
Shopko also plans to move more than 20 optical centers to freestanding locations. The company says it is encouraged by four freestanding optical centers it opened last year and will look to grow its optical business. All optical centers will remain open through the transition, the company says.
Finally, Shopko says it is auctioning its remaining pharmacy business.
The bankruptcy is the latest in a string of announcements from Shopko. Last month, it announced plans to close 39 stores, mostly Shopko Hometown stores, and sell the pharmacy business at more than 40 locations. Last week, the company confirmed plans to close the Shopko Hometown in Seymour, the Shopko Express in Buchanan and the full-size department store in Menasha.
Editor's note: A photo provided by the Neville Public Museum of Brown County and previously included in this story has been removed. Museum officials say they believe their information was incorrect and they now believe the photo shows a different ShopKo location, not the original store on Military Avenue.