National chain announces merger with Pamida

Shopko has announced big plans nationally, but the store in Austin has plans of its own.

Shopko Stores announced Wednesday plans to merge with Pamida to create one retailer, but in Austin, it’s all about remodeling.

Shopko representative Tara Zeller said the Austin store has just begun a five- to six-week process of remodeling the optometry department and reconfiguring the electronics section. Zeller said the retailer will be adding a lane for eye exams and adding new cabinetry and carpeting, along with a general upgrade. The store will also remove an interior wall and rearrange the electronics department.

Zeller said rumors of the store, located in Oak Park Mall, closing are false.

Nationwide, 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” brand.

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.

“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.

Over the past two years, Shopko has purchased seven stores from Pamida and successfully 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.