Shopko will receive up to $2 million in state economic development tax credits to help finance a corporate expansion project and create more than 120 new positions at its headquarters in Green Bay.
The company also announced a merger with another Midwestern retailer, the Nebraska-based Pamida, that will result in a “significant investment” in Wisconsin and creation of the new positions at its corporate headquarters. Pamida, which is based in Omaha, was once a division of Shopko.
Terms of the merger deal, which is expected to close in February, were not disclosed, but the two retail chains said the merger will create one of the largest U.S. retailers focused on serving smaller and rural communities.
Gov. Scott Walker said the tax credits, provided through the Wisconsin Economic Development Corp., will ensure that Shopko’s expansion takes place in Wisconsin.
The combined company, which will be headquartered in Green Bay, will use the Shopko name and be led by Shopko President and CEO Paul Jones.
Meanwhile, Pamida President and CEO John Harlow will help direct the integration process, as about $80 million will be invested over the next year for the conversion of most Pamida locations to the Shopko Hometown store theme.
Founded in 1962, Shopko reports $2 billion in annual revenue. It has 149 stores in 17 states throughout the Midwest, Mountain, and Pacific Northwest regions.
Pamida, which reports $1 billion in annual revenue, has 193 stores in 17 states, primarily in the Mountain, North Central, and Midwest regions. It was founded in 1963.
The merged entity will have 350 locations in 22 states.
Jones cited the complementary nature of the two chains, stating in a press release that the Shopko Hometown store concept fits smaller communities. He said the merged entity intends to be the leader in this category and plans aggressive, new-store growth.
Shopko has purchased seven stores form Pamida over the past two years, all of which had to be integrated into the Shopko brand. Their similar features also include pharmacy services and community involvement.
Both companies are owned by affiliates of Sun Capital Partners, a private investment firm focused on leverage buyouts.
