Pamida, Shopko Will Merge
Two of the nation's leading Midwest-based general merchandise retail chains, Shopko Stores and Pamida, announced on Wednesday that they will merge.
Together, the stores will have nearly 350 locations in 22 states. Financial details of the merger, which is expected to close in mid-February, were not disclosed.
With annual revenues of $2 billion, Green Bay, Wis.-based Shopko operates 149 stores in 13 states located throughout 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, and has revenues of approximately $1 billion. Both stores share similarities in product selection, service, and pharmacies.
"Customers will benefit from their combined resources, buying power and merchandising expertise, which will also set a solid foundation for future growth," says a news release related to the merger.
The combined company will be headquartered in Green Bay, will use the Shopko name, and be led by Shopko President, Chairman and CEO W. Paul Jones. Pamida President and CEO John Harlow 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.
Shopko Hometown combines pharmacy services with national brands and private label brands of apparel, toys, consumer electronics, seasonal items, and lawn and garden products – all in store formats that range from 15,000 to 35,000 square feet.
Over the past two years, Shopko has purchased seven stores from Pamida and successfully transitioned them to the Shopko Hometown format. These locations have seen a significant increase in store traffic, sales and profitability, the merger release says.
Once Pamida's chain-wide conversions are complete, the company plans to accelerate the addition of new Shopko Hometown stores in the second half of 2012 and into 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.
"This is an exciting move for Pamida, and the Shopko Hometown format will offer our customers an even better retail experience and a new and differentiated product offering that is not currently available in the smaller communities we serve," said Harlow. "Pamida's great associates, store locations, focus on personalized service, and commitment to giving back in our local communities are all ideal complements to Shopko."