Local Shopko closing due to financial restructuring

Employees of our local Shopko found out last Tuesday that the doors will soon be closing on our local store due the company filing voluntary petitions for a court-supervised financial restructuring under Chapter 11 of the United States Bankruptcy Code.

For a few months, Shopko had been releasing the locations of stores that were closing, but Thermopolis had not shown up on any of the lists until last week. The Worland Shopko will also be closing.

Since December, the company has been selling off stores in 19 states as well as some of its pharmacy business, raising eyebrows in the retail market as to the company’s future.

Founded in 1962, the company is headquartered in Green Bay, Wisconsin.

The company states it is seeking to facilitate the restructuring as a result of excess debt and ongoing competitive pressures.

Shopko owes $67 million to the McKesson Corporation, the company that provides their pharmaceuticals for distribution at their in-store pharmacies.

At the moment, our local pharmacy in the Shopko store is transferring prescriptions to Vicklund Pharmacy or to the pharmacy of the patient’s choice.

McKesson became concerned about the company’s viability when they were not receiving payments as expected. McKesson then negotiated the payment period down from 45 day to 21 days, but Shopko did not make its scheduled payment at that time and McKesson announced it would no longer provide inventory to the company.

Shopko has obtained up to $480M debtor-in-possession (DIP) financing from certain of its prepetition secured lenders, led by Wells Fargo, N.A. as administrative agent, to help fund and protect its operations during the Chapter 11 process. This incremental liquidity will ensure that suppliers and other business partners and vendors will be paid in a timely manner for authorized goods and services provided during the Chapter 11 process, in accordance with customary terms.

“This decision is a difficult, but necessary one,” said Russ Steinhorst, Chief Executive Officer. “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.”

On a local level, Shopko manager Val Richards said the store began their liquidation process last Friday. Plans are to close the store on April 7.