Shopko bankruptcy affects River Falls community
April 16, 2019
Green Bay-based retail chain Shopko has officially filed for Chapter 11 bankruptcy, and as of March 18th, is set to close all 360 of its stores - including the River Falls, Wisconsin, location -- by mid-June this year. As of 2019, Shopko will have operated for its 57th year.
According to a press release from Shopko Public Relations Manager Michelle Hansen, the company was “unable to find a buyer” following an unsuccessful auction of both is pharmaceutical subsidiary and main retail branch. Given the state of the company, it will “commence an orderly wind-down” of all retail operations, hiring the Gordon Brothers investment firm to oversee a liquidation process of all remaining assets, in which is set to complete approximately 10-12 weeks from the March 18 announcement date.
Shopko initially filed for bankruptcy on January 16th due to a combination of negative factors, including an increasingly challenging retail industry and dwindling assets. Originally planning to close about 100 stores, the company announced shortly afterward in February that it would close 251 of its 360 total locations following an unsuccessful auction of its pharmaceutical branch. As of the latest March 18th update, all 360 Shopko stores are officially set to close by no later than mid-summer of 2019.
Russ Steinhorst, CEO of Shopko, gave a short statement on the matter: “This is not the outcome that we had hoped for when we started our restructuring efforts,” he stated. “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.”
Though it was not initially announced during the first wave of closings, the River Falls Shopko location is now officially set to close following the bankruptcy filing. In a short statement given by Hansen, it is noted that approximately 1,000 workers will lose their jobs from solely the Wisconsin locations. Though no number has been officially given for the River Falls location, when comparing data from other similarly-sized locations nearby, it is estimated that around 50 people will be unemployed from this location alone.
Hossein Eftekari, a professor in the College of Business and Economics at UW-River Falls, provided some additional insight on the local Shopko closures. According to his analysis, “Shopko's bankruptcy is partially related to competing with [retailers] Walmart, Target, and Dollar General, and online stores such as Amazon.” Eftekari believes that the closure will affect River Falls fairly significantly, as he stated that “many people who used to shop at Shopko came from the surrounding rural areas of River Falls. These very same people increased the volume of transactions at different local businesses, such as restaurants, bars, sporting goods stores, et cetera.”
In noting the main negative impacts associated with the closing of the River Falls Shopko location, Eftekari gave four main points: lower sales for local businesses, loss of opportunity to shop locally and cheaply, reduction of a tax base for the city, and a decrease in employment opportunities for locals - specifically the young student workforce who attend UW River Falls.
In providing some advice for the impending closure, Eftekari stated that he does not foresee any large retailers like Wal-Mart or Target coming to take Shopko’s former place as the major retailer in River Falls. “The theory of ‘build it and they will come’ is not practiced anymore,” he says. In order to bounce back from the loss and revitalize the local retail job market, Eftekari proposes that the city divide up the retail areas into smaller bits, and work to fill these spots with local businesses who are willing to hire a younger workforce. This way, River Falls will remain local, provide people with needed goods and services, and provide a steady job market for the future.