The announcement yesterday that mass merchants Shopko Stores and Pamida would merge into one company under the Shopko name is being presented as big news for the small communities the two separate chains have specialized in serving.
Shopko, based in Green Bay, WI (Go Packers!), currently generates around $2 billion annually from 149 stores in 13 states stretching from the Midwest to the Pacific Northwest.
Pamida, based in Omaha, NE, operates 193 locations in 17 states in the Midwest, North Central and Mountain regions. The chain has annual revenues of roughly $1 billion.
The two businesses, both owned by Sun Capital Partners, will combine into a single chain with 350 stores in 22 states and plans for expansion. The company expects to invest $80 million over the next year to convert stores with the Pamida banner to the Shopko Hometown store concept.
The Shopko Hometown format, developed in recent years, is a smaller store concept, with locations ranging from 15,000 to 35,000 square feet. They combine pharmacies with national and private label clothing, consumer electronics, seasonal merchandise, toys and other products.
W. Paul Jones, president, chairman and CEO of Shopko, will continue to lead the company from the newly combined company's headquarters in Green Bay.
"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," Mr. Jones said in a press release. "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."
Jerry O'Brien, executive director of the Kohl's Center for Retailing Excellence at University of Wisconsin-Madison, thought the retailer's small town and rural focus could produce dividends.
"To find new places right now with the growth that Target and Walmart have had is very challenging," Mr. O'Brien told the Wisconsin State Journal. "I think it's really good for these towns. Some of these more outlying towns are not very well served. This will be fun to watch."
How optimistic/pessimistic are you that the Shopko and Pamida merger will be a success?