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Northland Shopko Stores Avoid Closure; Company Files for Bankruptcy

Updated: January 16, 2019 06:16 PM

Shopko, which operates six stores in the Northland, has filed for Chapter 11 bankruptcy. With the latest announcement of closures, it appears the stores located in the Northland will remain open. This includes stores in Duluth, Ely, Moose Lake, Two Harbors, Aitkin, and Spooner.

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In Duluth, shoppers said they were relieved to hear that their store would stay. Pete Sosnowski, from Cotton, told us, "It makes me very happy. And it will make my wife happier, because we both come to this store. It's her number one choice, and I guess mine, too."

He said he likes that it's not as crowded as other stores, and he can get in and find what he wants.

The news about the company filing for bankruptcy broke on Wednesday morning. A press release said that the company plans on closing 38 more stores. They also plan on relocating 20 optical centers to freestanding locations and conducting an auction process for its pharmacy business.

It also said Shopko has obtained $480 million dollars in financing, 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," the statement said.

An article in the Ely Echo said that Shopko had not made its monthly lease payment to the property owner in Ely, where there is a store.

This is the full statement from Shopko, which is based in Wisconsin:

"On January 16, 2019, Shopko, a leading operator of general merchandise stores throughout the Central, Western and Pacific Northwest regions of the U.S., announced that it, along with its subsidiaries, has filed voluntary petitions for a court-supervised financial restructuring under Chapter 11 of the United States Bankruptcy Code. 

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. 

Today's announcement provides clarity about the path forward for us, and we are confident the outcome will be a stronger Shopko. 

We will be sure to communicate with everyone throughout our reorganization and give regular updates as important decisions and major developments take place."

Copyright 2019 WDIO-TV LLC, a Hubbard Broadcasting Company. All rights reserved

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