Shopko Will Continue to Evaluate Strategic Options for Optical Business Amid Liquidation of Company

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GREEN BAY, Wis.—Shopko Stores announced Monday afternoon that a buyer could not be found to keep its “go-forward” stores running despite the company’s best efforts to find a buyer. As a result, the company said it plans to conduct an “orderly wind-down of its retail operations beginning this week.” Shopko noted, however, that it is evaluating strategic options for its optical business, a roughly $100 million annual operation at its peak in 2017. “This is not the outcome that we had hoped for when we started our restructuring efforts,’ Shopko chief executive officer Russ Steinhorst said in Monday’s announcement. “We want to thank all of our teammates for their hard work and dedication during their time at Shopko.”

In January, Shopko filed for a court-supervised financial restructuring under Chapter 11 of the bankruptcy code, as VMAIL reported. At that time, the company said it intended to relocate at least 20 optical centers from inside stores scheduled to close to new freestanding locations.

Late last year, Shopko began opening freestanding optical locations and the company had said it was “encouraged by the performance” of those first four freestanding optical centers, and that it planned to continue to build its optical business by opening additional freestanding locations this year. At the end of 2017, Shopko operated 135 optical centers and ranked at No. 17 in the annual VM Top 50 U.S. Optical Retailers Report published in May 2018.

However, the retailer was unable to regain its footing in the first three months of 2019, and has decided to close. “The company will not move forward with the auction that it previously contemplated, and Gordon Brothers will oversee a liquidation process that is expected to conclude 10 to 12 weeks from now,” Shopko said in its Monday announcement.

In its bankruptcy announcement, Shopko cited “excess debt and ongoing competitive pressures” as factors leading to the Chapter 11. The bankruptcy petitions were filed in the U.S. Bankruptcy Court for the District of Nebraska. Shopko had about 360 to 370 locations in the Midwest and Pacific Northwest earlier this decade, but had planned to close about 80 to 100 stores as part of its financial restructuring that began earlier this year.