The company was unable to find a buyer for the retail business and will begin winding down its operations beginning this week, the company said in statement released Monday. The decision to liquidate will bring an end to the brick-and-mortar business that began with one location in Green Bay, Wisc., in 1962.
"This is not the outcome that we had hoped for when we started our restructuring efforts," Shopko CEO Russ Steinhorst said in the statement. The company in February announced plans to close 250 stores, or about 70 percent of its locations, as it attempted to scale back the business and work through bankruptcy to restore profitability and attract a buyer or investor.
That list was expanded at noon Monday with the inclusion of the 120 stores that Shopko had hoped to keep open, according to a document filed Monday in U.S. bankruptcy court in Nebraska. Prior to bankruptcy, Shopko employed more than 15,000 people nationwide, according to court documents.
Employees at Shopko headquarters, in Ashwaubenon, found out about the liquidation during an emergency meeting on Monday. Individual stores had team meetings to pass along the same information.
The bankruptcy court had scheduled an auction for Tuesday morning in the hope of driving up the price of initial bids that were submitted last week. On Monday, it announced the auction was canceled and a bankruptcy consultant would oversee liquidation over the next 10 to 12 weeks.
The court filing indicates all store closures will be completed by June 16. The company said it continues to evaluate options for its optical business. Shopko had originally hoped to spin off the business into standalone locations as part of its reorganization. The optical business now becomes one of the assets it will look to sell in the liquidation process. The liquidation at the newly-identified closing stores will look much the same as what has occurred at Shopko stores that have already closed: Discounts will slowly increase over a period of weeks as the company looks to sell every bit of inventory and equipment on hand.
Shopko and its affiliates filed for bankruptcy protection on Jan. 16 citing assets of less than $1 billion and liabilities between $1 billion and $10 billion. It had sought a buyer that would keep a smaller number of the company's brick and mortar locations operating beyond bankruptcy.
