On January 16, 2019, Shopko, a leading operator of general merchandise stores throughout the Central, Western and Pacific Northwest regions of the USA, announced 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.
Shopko says it plans to continue operating through Chapter 11 reorganization after securing $480 million in financing from a group of lenders led by Wells Fargo Bank. 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.
"We are open for business", Shopko CEO Russ Steinhorst wrote in a letter to customers across the country.
It's now official: Shopko has filed for bankruptcy.
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The bankruptcy announcement on Wednesday is just the latest in a string of announcements from Shopko. The decision was reportedly based on Shopko's review of stores' long-term outlook for profitability, sales trends and potential growth. Chapter 11 allows a company to restructure its finances under court supervision. Shopko was founded by a pharmacist in 1962, and became a publicly traded company in 1991.
However, Powell's Shopko Hometown store itself is set to remain open - unlike dozens of Shopko locations that the company is planning to shutter across the U.S.
"GM [General Motors] and Chrysler went bankrupt and they reemerged and are thriving companies today", he says. In the Treasure Valley, that means Fred Meyer stores.
Numbers regarding the amount of job loss have not yet surfaced, but with 37 stores closing the writing is somewhat on the wall.
While the number of jobs impacted locally will depend on a question regarding how drastically they restructure the company.