The struggling ShopKo retail chain has added Chamberlain and Custer to the growing list of small towns in South Dakota that will lose their only department store in the coming months.
A spokeswoman for the Wisconsin-based retail chain said Thursday that it will begin liquidating merchandise at its stores in Chamberlain and Custer this week in advance of closure in the next three months. The statement follows the announcement in December that ShopKo will close its stores in Dell Rapids, Redfield, Wager and Webster in February.
“As of yesterday, Custer and Chamberlain were announced [for closure],” Michelle Hansen, a spokeswoman for Shopko, said Thursday. “They will begin liquidation tomorrow and will close on April 7.”
The December round of closures included about three dozen other ShopKo stores across the Midwest. Other than the six stores now targeted for closure in South Dakota, Hansen said there are no plans at this time to close the any of the remaining 14 ShopKo stores operating in South Dakota.
Each ShopKo location employs about 15 to 25 people who will lose their jobs when the stores close. The six towns where ShopKo is closing will also see a reduction in collection of sales taxes that are critical to maintaining municipal services, such as police and fire protection and upkeep of roads and parks.
Chamberlain Mayor Chad Mutziger said he heard from the local ShopKo manager that the store was performing well and also had been told recently by ShopKo corporate officials that the Chamberlain store was safe.
But this week, he and others in town were alerted that the ShopKo Hometown store on King Avenue, near the eastern exit into Chamberlain off Interstate 90, would be closing soon.
“It’s obviously terrible news for our community,” Mutziger said. “Not just the community of Chamberlain but for our whole area.”
The twin cities of Chamberlain/Oacoma along the Missouri River do not have another department store and Mutziger said shoppers looking for a big-box store with similar offerings would have to drive an hour east to Mitchell or more than an hour west to Pierre.
Custer and the four other South Dakota towns losing a ShopKo also do not have another local department store.
Mutziger said he is hopeful that when ShopKo closes, locals will do their shopping in town to boost small retailers and soften the hit on sales tax collections. Officials also fear that shoppers who leave town for home products will buy other goods and services they might otherwise have purchased locally.
“We have a vibrant Main Street that carries a mixture of things,” Mutziger said. “Chamberlain is a vibrant enough community that our other businesses can fill those gaps left by ShopKo.”
Experts say the decline in performance of ShopKo and other legacy retailers like Sears is being driven by the ease of online shopping and the rapid expansion of mega-stores such as Walmart and discount retailers including Dollar Tree and Dollar General.
Mutziger said he wouldn’t be surprised if the entire ShopKo chain, which has about 360 stores in 24 states, declares bankruptcy soon.
Over the past five years, ShopKo made inroads into isolated, rural Midwestern communities with smaller stores under its “ShopKo Hometown” brand which has fewer offerings than a full-sized ShopKo.
In addition to the six ShopKo stores being closed, the chain has locations in Aberdeen, Belle Fourche, Hot Springs, Madison, Milbank, Mitchell, Mobridge, Rapid City, Sioux Falls, Sisseton, Sturgis, Watertown and Winner.
— Mark Watson of the Black Hills Pioneer contributed to this report.