GREEN BAY, Wis. — Shopko Stores and Pamida, two of the nation’s leading Midwest-based general merchandise retail chains, are merging to sharpen its focus on serving smaller and rural communities.
The combined operation will have nearly 350 locations in 22 states and plans for new store growth in the second half of 2012. The merger is expected to close in February.
With annual revenues of $2 billion, Green Bay, Wis.-based Shopko operates 149 stores in 13 states located in the Midwest, Mountain and Pacific Northwest regions.
Omaha, Neb.-based Pamida operates 193 stores in 17 states, primarily in the Mountain, North Central and Midwest regions. Pamida has revenues of approximately $1 billion.
The combined company will use the Shopko name. W. Paul Jones will serve as Shopko president, chairman and CEO. John Harlow, Pamida president and CEO will serve on the leadership team and help direct the integration process. There will be no change to Shopko’s stores, and approximately $80 million will be invested over the next 12 months in the conversion of most of Pamida’s locations to the Shopko Hometown store concept and brand.
“Merging Pamida and Shopko is a great move for our businesses and our customers given our complementary strengths, store networks and consumer-centric retail models,” said Jones. “The Shopko Hometown store format, featuring our unique merchandising strategy and improved store design, is an ideal fit for the smaller communities that Pamida serves with its exceptional service and community-minded approach. We intend to be the leader in this category by combining the best of Shopko and Pamida in our aggressive new store growth plans.”
The Shopko Hometown retail format, developed over the past three years to augment Shopko’s larger store model, offers a differentiated and financially successful merchandising strategy.
Shopko Hometown combines pharmacy services with a broad and dynamic offering of strong national brands and high-value private label brands of apparel, toys, consumer electronics, seasonal items, and lawn and garden products – all in attractive, well laid out, easy-to-shop store formats that range from 15,000 to 35,000 square feet.
Jones said customers should benefit from their combined resources, buying power and merchandising expertise, which will also set a solid foundation for future growth.
Once Pamida’s chain-wide conversions are complete, the company plans to add new Shopko Hometown stores in 2012 and 2013.
Both companies are owned by affiliates of Sun Capital Partners, Inc., a leading private investment firm focused on leverage buyouts, equity, debt, and other investments in market-leading companies.
“The Shopko Hometown format will offer customers an even better retail experience and a new and differentiated product offering that is not currently available,” said Harlow. “Pamida’s great associates focus on personalized service, and commitment to giving back in our local communities.”
After the remake, each former Pamida store has typically added one or two employees. Pamida employees are eligible to maintain their pay and benefits. Managers are invited to work for Shopko Hometown.
The merger creating 350 stores in 22 states sharing the Shopko banner is expected to be completed in February. Shopko also plans on buying or building more stores in the last half of this year and in early 2013.
In 1999, Shopko Stores, Inc., a Fortune 500 company based in Green Bay, Wis., bought Pamida and operated the stores as one company.
In 2005, Sun Capital bought both chains. At that time, Pamida was separated from the SkopKo umbrella and re-established corporate headquarters in Omaha, Neb. Pamida’s headquarters in Omaha will eventually close and its corporate operations will move to Shopko’s home in Green Bay.