Shopko Stores, Pamida to merge

Shopko stores including the one in North Branch, pictured, will not be impacted by the merger between general merchandise retailers Shopko and Pamida. Photo by Jon Tatting

Two of the nation’s leading Midwest-based general merchandise retail chains, Shopko Stores and Pamida, recently announced they will merge to create one of the largest U.S. retailers focused on serving smaller and rural communities.

“There will be no impact on current Shopko stores,” affirmed Shopko spokesperson Tara Powers when asked if the store in North Branch would be affected. “The change will be seen at Pamida stores that will be converted over to the Shopko Hometown format over the next year, but Shopko stores will remain as is.”

The combined entity will have nearly 350 locations in 22 states and plans for new store growth to begin later this year. Financial details of the merger, which is expected to close in mid-February, were not disclosed, according to a press release on behalf of the retailers.

The release continued:

With annual revenues of $2 billion, Green Bay, Wis.-based Shopko operates 149 stores in 13 states located throughout the Midwest and western regions. Pamida, based in Omaha, Neb., operates 193 stores in 17 states, primarily in regions including the Midwest, and has revenues of about $1 billion.

Pamida and Shopko are complementary in terms of locations and communities served, as well as a shared focus on brand-name selection, personalized service, pharmacy services and community involvement.

The combined company, to 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 a broad offering of national brands and high-value private label brands of apparel, toys, consumer electronics, seasonal items, and lawn and garden products.

Over the past two years, Shopko has purchased seven stores from Pamida and successfully transitioned them to the Shopko Hometown format. These locations have delivered an improved customer experience and have seen a significant increase in store traffic, sales and profitability, affirming the potential of the merger.

Once Pamida’s chainwide conversions are complete, the company plans to accelerate the addition of new Shopko Hometown stores later this year 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.

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