BROWN COUNTY, Wis. (WBAY/WMTV) - Two Madison and one Mauston Shopko stores will be closing after the Ashwaubenon-based retailer filed for Chapter 11 bankruptcy protection.
The Madison stores are located on Zeier and Mineral Point Roads.
Shopko says it is looking to restructure the business as a result of "excess debt and ongoing competitive pressures."
"Business trends for us, like many retailers, have been difficult over the past few years," reads a statement from the retailer.
Shopko says it has $480 million in debt.
The retailer plans to close an additional 38 stores and relocate 20 optical centers to "freestanding locations." It will conduct an auction for the pharmacy business.
For a list of the stores Shopko plans to close, including several others that make up the 16 closings in Wisconsin, click here
Optical and pharmacy will remain open during the bankruptcy proceedings.
“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 that will better serve our customers, vendors, employees and other stakeholders through this process.”
In a letter to customers, Shopko says its remaining stores will be open during restructuring. Gift cards, warranties, credits and returns will continue at the open stores.
Once the pharmacy business is sold, Shopko says it will tell customers where their prescriptions will be transferred.
In recent weeks, Shopko has announced the closure of dozens of stores, including locations in Seymour and Buchanan.
Kroger and Hy-Vee have purchased some of Shopko's pharmacy business.
Earlier this month, Action 2 News obtained documents detailing a complaint filed by pharmaceutical vendor McKesson Corporation against Shopko. McKesson is the primary supplier of pharmaceuticals, health and beauty care products to the retailer.
Documents show Shopko owes $67,265,343.24 to McKesson for products. The complaint goes on to say that Shopko made misrepresentations "regarding its solvency" and ability to pay for products it purchased from McKesson.
McKesson has asked a Brown County judge to enter a judgment against Shopko for the $67 million and other fees and costs. An injunction hearing in that case is scheduled for Jan. 24.
Shopko's bankruptcy petition was filed in the United States Bankruptcy Court for the District of Nebraska. No court date has been scheduled.
Action 2 News will continue to update this breaking news story.