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Jan. 22, 2019
Note: This story has been updated.
One Sioux Falls Shopko location has been added to the retailer’s list of store closures as it filed for Chapter 11 bankruptcy protection Jan. 16.
The store at 4501 E. Arrowhead Parkway is scheduled to close by April 15. The one at 1601 W. 41st St. originally was announced as a closure but then taken off the list.
It’s likely that Shopko’s optical business could remain in the city, as the company said it plans to relocate more than 20 Shopko Optical Centers to freestanding locations. Both Sioux Falls stores are on a list of optical centers that will remain open during closures and are scheduled to be relocated.
“Your optical center will be relocated very soon to a new location with the same patient care you have come to expect from your Shopko Optical center,” the store’s website said.
In recent weeks, Shopko has announced several store closures in South Dakota, including one in Dell Rapids. A reprieve came Tuesday, however, for another store. The Shopko staff in Chamberlain learned that their store would not be closing, according to a manager.
Declaring Chapter 11 bankruptcy will begin a court-supervised restructuring that the company said is meant to help it reorganize.
“This announcement is an important step towards protecting our future and ensuring our ability to continue delivering the high-quality products and services that our customers are accustomed to receiving,” Shopko said in a statement.
“This decision is a difficult, but necessary one,” CEO Russ Steinhorst said. “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.”
The company cited excess debt and ongoing competitive pressures as the reasons behind the bankruptcy filing. It has received $480 million in debtor-in-possession financing to help fund and protect its operations during the Chapter 11 process.
Shopko plans to auction off its remaining pharmacy business.
Shopko owes an estimated $67 million to pharmaceutical drug supplier McKesson Corp., which is believed to be one factor behind the bankruptcy. An attorney for McKesson argued last week his company would struggle to collect what it’s owed if Shopko filed for Chapter 11.
The Wisconsin-based retailer was founded in 1962. It operates more than 360 stores in 26 states.
The two Sioux Falls locations have been added to the retailer’s list of store closures as it filed for Chapter 11 bankruptcy protection.