Monday was a rather sad day here in Fort Atkinson, as we received word that Shopko will be closing all of their remaining stores, within the next few months. The retailer had been trying to find a buyer to take on their remaining stores, but has failed to do so.
This leaves a major retail hole in our city. After having lost K-Mart in 2014, Shopko was the remaining major retailer. Like many places in Wisconsin, Shopko became our sole location to purchase basic goods like shoes, new clothing, household staples, and other items locally.
Shopko on Janesville Avenue in Fort Atkinson, closing in early June.
Fort Atkinson has a strong culture of wanting to keep shopping local. This is evidenced by still having a decent amount of locally owned shops in our downtown, and the continually thriving Farmer’s Market that our city hosts on a weekly basis every year. We also have a very active Chamber of Commerce that promotes the “shop local” ethic.
As many residents know, Walmart approached Fort Atkinson years ago, desiring to open a new store here. A group of local residents initiated a campaign to resist Walmart, and the retailer eventually opened a store in Jefferson instead. Walmart also currently operates a location in nearby Whitewater.
While it might be tempting to say, “We should have let Walmart come in!”, I would point out that not every Walmart store is successful. At the time, our city still had K-Mart and Shopko, and there’s no guarantee Walmart would have remained open indefinitely in our community. Alternatively, maybe Walmart would have thrived, but there’s a good chance other smaller shops in our downtown would have closed.
Shopko’s demise is not the fault of shoppers in Fort Atkinson, or any other community. This recent article from the Milwaukee Journal-Sentinel explains a major problem with the company:
Shopko’s creditors want to force the company’s owners to return $117 million in dividends paid over the last four years.
In a motion filed in bankruptcy court on Tuesday, a committee representing some of the company’s largest landlords and suppliers said $67 million in special dividends and fees constituted a “fraudulent conveyance” while another $50 million in dividends were “illegal.”
The creditors committee is seeking a Nebraska bankruptcy judge’s permission to attempt to recover those claims, which could add millions of dollars to Shopko’s balance sheets at a time when unsecured creditors, those who do not have a claim to collateral, face a real chance of not receiving anything of what the Ashwaubenon-based retailer owes them for inventory, services and leases.
In February, Shopko’s two independent directors identified $179.5 million in dividends paid to Shopko’s private equity owners — Sun Capital, Waverly Securities, KLA Shopko LLC and H.I.G. Sun Partners Inc. — between 2007 and 2015. The company borrowed money to pay the dividends, according to court documents.
So we have an example of a company that paid investors huge sums of money, through borrowing, while Shopko continued to struggle. Fort Atkinson now, like other communities, is faced with the prospect of a vacant retail site, and a loss of jobs.
So, what should we do about it? I will share that, like many citizens, I still desire to have a major retailer in Fort Atkinson. We deserve to have a store in our community where we can go for basic necessities. Personally, I purchased my contacts and other optical needs there, and would shop there regularly. My wife and I would also do a decent amount of our Christmas shopping there. I will miss having them in Fort Atkinson.
I can tell you that our city manager and I have already started contacting other retailers, to inquire about their prospects for future stores in our city. I do not want to get any hopes up, though, that we will be able to find a new retailer in the near future. Nationally, most major retailers are not expanding, and many of the existing ones limit their locations to larger metro areas (ie. cities the size of Madison, Milwaukee, Janesville, etc).
I will also share that Costco and Meijer have already turned us down, as far as any plans for a Fort Atkinson location. This is mainly due to their population requirements for a given market.
My personal view is that the majority of future retail store growth in our community won’t be initiated by outside interests. I would suggest that it will be initiated by residents living and working in our own city. Maybe we won’t have a major “big box” store again, but maybe we could have several smaller retail stores, possibly owned by local entrepreneurs.
Fort Atkinson is a city that often doesn’t receive a lot of assistance from the outside. It often feels like we don’t have anyone advocating for us in Madison, and the federal government certainly isn’t stepping in to help us. Most of our biggest successes have been accomplished by ourselves, by people right here in our community.
Our future is in our hands. We need to start having conversations now, about what we want our city to look like in the future. Our recently approved Comprehensive Plan update (just passed this Tuesday), calls for retaining and growing retail and locally owned businesses. Let’s work together to make sure that happens.
If you have thoughts, please share them here, or email me at mbecker@fortatkinsonwi.net.
