Shopko closing

Retail chain Shopko closed earlier this year, shuttering area stores in Dubuque, Dyersville, Iowa, and Lancaster, Wis. 

Trina McInerney began working at the Dubuque Shopko store in 2007 and remained an employee until the retailer shut its doors for good last month.

But her mostly positive experience at the retailer transformed into a nightmarish scenario this year.

Shopko officials in March announced plans to close locations in Dubuque, Dyersville, Iowa, and Lancaster, Wis. They shuttered all three locations months later.

“We had a wonderful group of people working there,” McInerney said. “We considered each other family. When we learned Shopko was closing, we were shocked.”

Frustrated by her final days with Shopko, McInerney has joined a growing effort to hold the retailer’s owner, Sun Capital Partners Inc., accountable for the way in which it treated employees and wound down operations.

McInerney is among hundreds of Shopko employees who signed a letter of protest addressed to Sun Capital’s leaders. Among their complaints is a claim that Sun Capital failed to follow through on promises of severance pay.

However, the company’s position is that an allotment included in Shopko’s bankruptcy plan is sufficient to handle any severance claims.

“Sun Capital has agreed to contribute $15.5 million to Shopko, which is more than enough to pay severance claims,” they wrote. “This money is being contributed under a Chapter 11 plan that provides for paying all administrative and priority claims.”

But former Shopko workers, in their letter, say they’re not being treated fairly. They specifically call for Sun Capital to “set up a fund to pay the severance that all Shopko employees impacted by the liquidation rightfully deserve.”

The demand for accountability has gained the support of U.S. Sen. Tammy Baldwin, D-Wis., who plans to meet with former Shopko leaders today in Green Bay.

BALDWIN EXPRESSES ANGER

In an emailed statement to the Telegraph Herald, Baldwin pulled no punches in assessing Sun Capital’s impact.

She blamed Sun Capital’s “mismanagement and predatory playbook” for the loss of 3,000 jobs in Wisconsin.

“This out-of-state, predatory private equity firm has no respect for the dignity of hard work, and I won’t stand by while promises are broken to these workers who, in many cases, have given decades of service to Shopko customers,” Baldwin wrote. “I called for Sun Capital to establish a fund to pay severance for all Shopko workers affected by this liquidation. We need to do right by them and reward their hard work.”

This is not Baldwin’s first attempt to weigh in on the issue.

On June 19, she issued a letter to Sun Capital co-CEOs Marc Leder and Rodger Krouse.

Within the letter, Baldwin retraces Sun Capital’s history with Shopko.

The Florida-based firm bought Shopko in 2005, Baldwin recalled. Since then, Baldwin wrote, Sun Capital “loaded Shopko up with debt to fund even more payouts to Sun Capital executives and its investors.”

The senator concludes that the firm’s decisions played “the decisive role” in driving Shopko out of business.

Baldwin also notes that Sun Capital owes the state of Wisconsin $13.5 million in unpaid taxes and penalties. Moreover, she accuses the firm of manipulating former Shopko employees with unfulfilled promises of severance pay.

“To ensure an orderly liquidation, Shopko promised — in written communications — severance pay to its employees in exchange for working to close down their hundreds of stores,” Baldwin wrote.

She goes on to state that these workers learned “they won’t receive any severance after all.”

‘DEVASTATING’ IMPACT

McInerney, who has yet to land a new job after Shopko closed, called the sudden loss of her job “devastating” from both a personal and financial standpoint.

“I think they owe us severance pay or something,” she said. “We never got anything. ... I think they need to be held accountable.”

McInerney believes the closure’s impact extended beyond the employees.

“There were a lot of people that did their shopping there,” she said. “The customers got to know all the people who worked there. (The closure) was disappointing to the whole community.”

In Dyersville, Shopko’s closure left a similar void.

“It is definitely missed. Tremendously missed,” said Karla Thompson, executive director of the Dyersville Area Chamber of Commerce.

She noted that Shopko’s closure has forced some Dyersville residents to do their shopping out of town.

Thompson said she is hopeful that the retailer’s former building will soon have a new occupant. However, she isn’t expecting another big-box retailer to swoop in and take over the entire structure.

“I really think it will end up being divided into smaller sections,” she said. “We could see a mixture of entertainment and retail.”

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