ELDORA — Three area Shopkos are among those closing as the retailer reorganizes under a Chapter 11 bankruptcy petition filed Wednesday, including the store in Eldora.
Shopko announced that 38 stores of the Wisconsin-based chain are targeted for closure. The others include Shopkos in Hampton and Vinton.
The company says excessive debt and ongoing competitive pressure are forcing it to seek bankruptcy protection from creditors. Shopko is reporting assets of less than $1 billion and liabilities of between $1 billion and $10 billion.
Shopko says it plans to continue operating through Chapter 11 reorganization after securing $480 million in financing from a group of lenders led by Wells Fargo Bank. The financing will allow Shopko to continue to pay employees, vendors and suppliers.
Last month, the Green Bay-based chain announced plans to close about 40 of its more than 300 stores across the country. The new list of 38 additional stores includes 11 in Iowa, eight stores in Nebraska and seven in South Dakota.
“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.”