Physical retailers have been going bankrupt at an alarming rate. The “retail apocalypse” as it has been referred to in the media has claimed big-name victims such as Sears, Toys “R” Us, Gymboree, Charlotte Russe etc. Well, the apocalypse has struck again. Shopko, a discount retailer from Wisconsin, has announced that it will shut down its operations by June this year. The retailer has a total of 350 stores around the country.
The company had announced earlier in the year that it was filing for Chapter 11 bankruptcy and restructuring its debt. In an effort to stay afloat, the struggling retailer had decided to close a portion of its stores. The plan would have seen at least 120 locations around the country remain open but it seems things didn’t work out. Shopko is now folding and it will start to liquidate all its assets to pay creditors.
Shopko’s CEO Russ Steinhorst said that it was indeed a sad moment for the company adding that this was not the outcome they were hoping for. The CEO also thanked all stakeholders and customers who have been part of Shopko over the years. The retailer opened its first store in 1962 in Green Bay, Wisconsin. It grew after that to become one of the largest brick-and-mortar stores in the US. As of 2019, the chain had 15,000 employers nationwide.
However, experts have argued that the company’s fate was inevitable. Shopko has often been considered a rural retailer. The economy of rural America has been on the downturn over the last decades and it was just a matter of time before the retailer was caught up in the spiral. Besides, Shopko was in huge debt and the surge of e-commerce didn’t help things. Like many other retailers that have already gone under, Shopko failed to figure out how to stand out and compete in the age of digital shopping. Although the retailer had an e-commerce website for customers to shop, it was not nearly as advanced or as efficient as Amazon’s or Walmart’s e-commerce platforms. The website also appears to be out of service at the moment.
The US retail collapse has been very fast and sudden. Even as Shopko and other retailers close shop, there are others that are struggling to stay afloat. Many have in fact closed hundreds of stores across the country to be more efficient. In early March this year, for example, J.C. Penney, Gap, and Victoria’s Secret all announced that they were downsizing by closing a total of 300 locations across the country. Sears Holdings, another iconic US retailer, has also been struggling and many retail experts believe that the department store will not last till the end of the year.
It’s been a terrible time in the brick-and-mortar space as more people consider online shopping. In contrast, Amazon, the biggest e-commerce platform in the US, has continued to report huge growth. The company is also investing in futuristic technology that could actually make physical retail locations more efficient. But so far, it seems many more traditional brick-and-mortar stores will continue to fall off the wagon.