Shopko, Pamida to merge companies

• Shopko logo

Shopko logo

Talk about it

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

The combined entity will have nearly 350 locations in 22 states and plans for new store growth in the second half of 2012 and beyond. 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.

The combined company, which 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.

“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,” Jones said.

The Shopko Hometown retail format, developed over the past three years to augment Shopko’s larger store model, combines pharmacy services with an offering of national brands and private label brands of apparel, toys, consumer electronics, seasonal items, and lawn and garden products in stores that range from 15,000 to 35,000 square feet.

Over the past two years, Shopko has purchased seven stores from Pamida and transitioned them to the Shopko Hometown format.

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 private investment firm focused on leverage buyouts and other investments in market-leading companies.

Tags: news, updates, shopko, pamida, merger, business