Green Bay-based Shopko announced on Jan. 16 that it, along with its subsidiaries, has filed voluntary petitions for a court-supervised financial restructuring under Chapter 11 of the United States Bankruptcy Code. The company is seeking to facilitate the restructuring as a result of excess debt and ongoing competitive pressures.
The petitions have been filed in the U.S. Bankruptcy Court for the District of Nebraska. During the restructuring process, Shopko will continue to operate and serve its customers, vendors, partners and employees. The Sister Bay Shopko has alerted pharmacy customers that it can only provide prescriptions for drugs they have on hand. Shopko has obtained up to $480 million debtor-in-possession financing from certain of its prepetition secured lenders, led by Wells Fargo as administrative agent, to help fund and protect its operations during the Chapter 11 process.
This incremental liquidity will ensure that 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, in accordance with customary terms.
“This decision is a difficult, but necessary one,” said Russ Steinhorst, chief executive officer. “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.”
In order to position the company for future success, Shopko has announced it will close an additional, as yet unnamed 38 stores, relocate 20-some optical centers to freestanding locations and conduct an auction process for its pharmacy business. The company has 76 stories in Wisconsin. Additional information is available on the company’s restructuring website at info.shopko.com or by clicking on the Restructuring link on Shopko.com.