Northland Shopko Stores Avoid Closure; Company Files for Bankruptcy

Ivan Schwartz
January 18, 2019

Two Madison and one Mauston Shopko stores will be closing after the Ashwaubenon-based retailer filed for Chapter 11 bankruptcy protection.

As part of its efforts to improve its balance sheet and bolster its business, Shopko announced the closure of 39 underperforming stores last month - including its Greybull location.

"This decision is a hard, but necessary one", said Russ Steinhorst, chief executive officer, in a news release.

The bankruptcy is the latest in a string of announcements from Shopko. McKesson Corp. has said it supplied Shopko with $67 million in drugs since November 11 but has not been paid since early December.

The retailer plans to close an additional 38 stores and relocate 20 optical centers to "freestanding locations". McKesson took Shopko to court in an attempt to prevent the pharmacies from selling its drugs. Shopko reported that it will lay off 100 employees when the Boise stores close. All other stores remain open as Shopko continues to optimize its store footprint.

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The company said the optical centers at both locations were expected to remain open, but in new locations. Shopko is reporting assets of less than $1 billion and liabilities of between $1 billion and $10 billion.

The Green Bay, Wisconsin, company has 363 stores in 24 states, according to its website.

(Batesville, Ind.) - Shopko is closing more than 100 stores across the USA, including its Batesville location.

Shopko is owned by an affiliate of Sun Capital Partners, Inc., a private investment firm headquartered in Boca Raton, Fla. that's focused on leverage buyouts, equity, debt, and other investments in market-leading companies.

Shopko is also filing customary first-day motions that, once approved by the court, will allow it 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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