Shopko will liquidate its assets and close all of its remaining locations by mid-June.
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 in 1962 with one location in Green Bay, Wisconsin.
“This is not the outcome that we had hoped for when we started our restructuring efforts,” Shopko CEO Russ Steinhorst said in the statement. “We want to thank all of our teammates for their hard work and dedication during their time at Shopko.”
In February, Shopko 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.
The closings list was expanded Monday to include the 120 stores that Shopko had hoped to keep, according to a document filed Monday in U.S. bankruptcy court in Nebraska.
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The court filing indicates all store closures will be completed by June 16.
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 will oversee liquidation over the next 10 to 12 weeks.
Shopko said it continues to evaluate options for its optical business. The company 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 closing Shopkos: Discounts will slowly increase over a period of weeks as the company looks to sell every bit of inventory and equipment on hand.
Craig Stevenson, a Madison-based partner with DeWitt Law Firm with expertise in bankruptcy law, said liquidation involves attempting to maximize the value of Shopko’s assets by selling everything it can.
“The concept is to take all assets and make as big a pile of money as you can as efficiently as you can,” Stevenson said. “The idea is to take everything there and make it money that can be distributed to claimants in the bankruptcy.”
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.
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Contact Jeff Bollier at (920) 431-8387 or firstname.lastname@example.org. Follow him on Twitter at @GBstreetwise.