Shopko’s closing product of struggling chain; City addresses Shopko closing: ‘Our thoughts are with the employees’

Published 9:04 am Friday, February 8, 2019

Shopko announced that its Austin location is slated to close on May 12, the latest of many closures for the struggling retail chain.

“We’re mindful there are individuals and families directly impacted by this announcement,” said City Administrator Craig Clark. “Our thoughts go out to those dedicated employees who serviced our community for so many years. We know the retail environment is in great flux and nothing can be taken for granted. Like others, the Shopko announcement is not confined to Austin and is clearly a broader company challenge.”

The Wisconsin-based company released an extended list on Wednesday of additional stores it plans to close nationwide. Included on the list was the Austin location as well as the Albert Lea location. Other states affected include Iowa, Wisconsin, North and South Dakota, Nebraska, Illinois, Montana, Washington, Indiana, Texas, Kansas, Michigan, Missouri, Oregon, Wyoming, Arizona, New Mexico, Colorado, Utah, Nevada and California.

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In January, Shopko announced that it had filed voluntary petitions for a court-supervised financial restructuring under Chapter 11 of the United States Bankruptcy Code. Shopko Chief Executive Officer Russ Steinhorst called the decision “difficult, but necessary.”

With the January announcement, Shopko also provided a list of 38 closing stores, including locations in Rochester and Fairmont. The Austin and Albert Lea locations were not initially slated for closure, but it was clear that more changes were imminent.

“It remains to be seen what the Shopko store will transition to, but I’m hopeful we can build on some of the other developments and see the Shopko space repurposed,” Clark said. “Clearly more retail options are something we want to see, and hopefully a brighter day will be had with this retail location.”

Although Shopko’s decision to close the Austin location was part of a broader company plan that affected multiple locations, Clark did urge residents to continue shopping locally.

“This is an opportunity for us all to consider our shopping choices and commit to shopping at our local stores,” he said. “When we struggle to make sense of this, patronizing our local stores is something we can do directly and does have a ‘local multiplier effect’ if we choose to explore the local offerings first. Shopping local makes us more resilient. While Shopko is obviously not a mom and pop store, decisions about sales volumes is the benchmark. If we have ‘retail leakage’ as we shop outside of Austin that impacts the viability of the store.”