Nationwide store closings now up to 105
By KIRBY ROSS
Phillips County Review
PHILLIPSBURG — As predicted on the pages of the Phillips County Review on Dec. 12, the situation regarding Shopko is much more dire than just having a few stores being unprofitable.
Instead of there being a problem along the lines of having a drought in cash flow that could be fixed locally, it turns out the situation is more of a nationwide tsunami.
Although warning signs had been in the air for a number of months, the Phillips County general public first became generally aware of a problem following a staff meeting at the Phillipsburg Shopko on Dec. 4, at which time employees were notified the store was closing along with 37 more across the nation.
Now, last Wednesday, almost six weeks later, the company has announced it has filed for bankruptcy and is engaging in another round of store closings that will bring the total number of shuttered locations to 105.
“This decision is a difficult, but necessary one,” Shopko CEO Russ Steinhorst said in the press release last week. “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 addition to the store in Phillipsburg, other Kansas locations that are slated to close now include Russell, Clay Center, Anthony, Scott City, Lyons, Larned and Burlington.
The Phillipsburg location had just opened in March 2016, less than three years ago.
Beginning the year 2015 with 320 stores in 21 states, by 2016 glowing reports regarding Shopko were appearing in the nationwide media, with 65 more new locations having opened in a little over a year.
“The rural population is grossly underserved by retailers, so we’re eager to bring Shopko Hometown to more communities,” former Chief Executive Officer Peter McMahon said at the time.
Part of that mass expansion involved Shopko taking over existing locations belonging to ALCO, which had filed bankruptcy in October 2014. The chain was liquidated shortly thereafter, with the Phillipsburg ALCO having shut its doors for the last time in March of 2015.
The underlying Shopko problem may be more complicated than having undertaken expansion too quickly or in the wrong locations — a massive shift in the way Americans shop is probably the culprit, business analysts say.
More precisely, the internet is likely at the root of the problem.
As reported by the Phillips County Review on Dec. 12, “Retail Dive, which provides analysis of businesses and business trends to retail executives, reported that Shopko has been buffeted by intense pressures in retail, some perennial and some part of more recent changes in American demographics, the economy and innovations like e-commerce, spurring new customer expectations.
“Retail Dive states that retailers who do respond well to new aspects of competition leave less nimble rivals like Shopko even further behind. Legacy retailers like Target and Walmart, for example, have overhauled their e-commerce operations and leveraged their store fleets to blur channels and meet new expectations, turning tables on Amazon but making it that much harder for the likes of Shopko to keep up.”
Republished with permission.