GREEN BAY, Wis.—Shopko’s optical business will continue operating, albeit in a reduced state, after a bankruptcy court’s decision late Thursday. The court in Omaha, Neb., overseeing Shopko’s liquidation approved the $8.5 million sale of the optical business to a new entity, Shoptikal LLC, an affiliate of Monarch Alternative Capital. Company executives expect the go-forward Shopko Optical business will consist of about 80 standalone locations. Previously, the majority of the optical locations were inside Shopko discount stores, but the company had begun shifting to freestanding locations late last year.

Shopko has previously said that Monarch Alternative Capital was the winning bidder in the auction for the optical business, as VMAIL reported, but the court had not approved the sale until this week.

Monarch Alternative Capital, a private investment firm with an office in New York, focuses on the debt of distressed and bankrupt companies and has “a long-standing and successful track record in the distressed debt asset class,” according to the firm’s website. The company previously teamed with another investor group to acquire more than 75 Shopko store properties and other assets, but the firm seemingly has no other investments in the optical business.

Russ Steinhorst, chief executive of Shopko Stores, said in a statement that the retailer is excited to announce that the court has entered an order approving the sale of Shopko Optical to Shoptikal. The “final closing” of the transaction is anticipated to be on or before May 15, he said.

“We now can move forward with our plans to operate 80 standalone optical stores in the communities where we have served our patients and customers for over 40 years,” Steinhorst said in the statement. “We anticipate a seamless experience for our patients, customers and Optical teammates.”

Shopko had filed for bankruptcy protection in January, and after failing to develop an operating plan, subsequently announced its intention to liquidate. The company operated about 135 optical departments as recently as last year, and ranked as the No. 17 retailer in the VM Top 50 U.S. Optical Retailers report, with sales of almost $100 million annually. Shopko began opening freestanding optical stores in late 2018 and it had five of these locations operating as of January.

According to an earlier court filing, Shopko said it expects that Monarch will acquire “all tangible property, accounts, machinery, equipment and inventories associated with the company’s optical laboratory in De Pere, Wis." The filing also noted that the buyer will consider extending employment offers “to substantially all of the employees of the optical business effective as of the sale closing, who are primarily engaged in the optical business at the locations being transferred to buyer.”