The American retail sector continues to get pummeled by competition from Amazon:
General merchandise retailer Shopko on Wednesday filed for Chapter 11 bankruptcy protection and said it would close more than 100 stores as part of its reorganization plan.
The troubled company, already in the midst of closing more than 60 stores, added 38 more store closures with its bankruptcy announcement, a spokesperson confirmed to CBS MoneyWatch. Shopko was not immediately able say how many of its 18,000 employees might be affected by the store closures.
Shopko is relocating over 20 optical centers to freestanding locations, and conducting an auction process for its pharmacy business, it said in a news release. (See the list of various store closings below.) It’s secured up to $480 million in financing from a group of lenders led by Wells Fargo Bank that will let it continue operating, Shopko said.
“This decision is a difficult, but necessary one,” Russ Steinhorst, Shopko’s CEO, said in the statement. “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.”
Purchased by Sun Capital Partners, a private-equity firm, for about $1.1 billion in 2005, the Green Bay, Wisconsin-based company operates 363 stores in 24 states under varying formats, according to its website.
Children’s clothing retailer Gymboree Group Inc filed for Chapter 11 bankruptcy protection, the second time in almost two years, and said on Wednesday it will close more than 800 Gymboree and Crazy 8 stores.
The San Francisco-based company said it will also sell its high-end line, Janie and Jack, as well as its intellectual property and online platform.
The company’s Canadian arm, Gymboree Inc, also intends to seek bankruptcy protection, it said.
Gymboree is the second U.S. retailer to file for bankruptcy on Wednesday. Earlier, Shopko Stores, a general merchandise store operator, filed a voluntary petition in Nebraska.
More than 20 U.S. retailers, including Sears Holdings Corp and Toys R US, filed for bankruptcy since the start of 2017, succumbing to the onslaught of fierce e-commerce competition from companies like Amazon Inc.
Gymboree, which started making children’s clothing more than 30 years ago, operates about 540 Gymboree stores and outlets in the United States and Canada. It also has about 265 stores across the United States under the ‘Crazy 8’ brand and 139 shops under ‘Janie and Jack’.