ShopKo Stores announces buyout of Pamida

I first started at the Bemidji (Minn.) Pioneer as an intern in the summer of 1996. That would begin six years as a news reporter, sports reporter and copy editor for a small, six-day-per-week daily newspaper in northern Minnesota. I wrote a large range of stories from multiple beats, to features to sports, my favorite being the coverage of the Red Lake Reservation High School basketball team named the Warriors. Here is a collection of my stories from my time at the Pioneer.

May 12, 1999

By Devlyn Brooks

Bemidji's Pamida Discount Center will remain mostly unaffected by Tuesday's buyout of the Pamida corporation by ShopKo Stores, according to Assistant General Manager Mitch Nelson.

"We're going to operate the same," Nelson said Tuesday. "It's not going to affect our store here in town in any way. All of our policies we've had will remain in effect."

ShopKo Stores, Inc. and Pamida Holdings Corporation jointly announced ShopKo's acquisition of Pamida Tuesday in a transaction that values Pamida at about $375 million, including the assumption of $265 million in debt and capitalized lease obligations.

Nelson said his store was informed of the sale Tuesday morning.

According to a news release, ShopKo intends to keep Pamida as full subsidiary, while also keeping the retailer's name.

That means Bemidji's Pamida, which has been operating for about 27 years and is owned by the franchise, will stay the same even in name, according to Nelson.

"It will give us greater buying power, and we'll be more competitively priced," Nelson said of the buyout.

General Manager Gene Frost of Bemidji's Big K-mart store declined to comment about how the sale might affect his business. General Manager Curt Blumhagen of Bemidji's Target Stores said the sale would not change the way his store does business.

According to the ShopKo news release, the addition of Pamida to its current company will make it more competitive in markets under 20,000 people -- exactly where 92 percent of Pamida stores are located.

ShopKo stores, by contrast, are located mostly in trade areas of 20,000 to 300,000 people.

"With our acquisition of Pamida, ShopKo is fulfilling its promise of aggressive growth to our shareholders, and at the same time we are adding a retail format with significant potential for expansion," ShopKo President and Chief Executive Officer William J. Podany said.

"Pamida is a small town, rural retail concept that offers great growth potential across the United States," he said. "ShopKo's financial strength, effective business practices and proven core competencies will enable Pamida to improve its performance and grow while retaining its identity."

Pamida, which recorded sales of $672 million in last year's fiscal year that ended Jan. 31, operates 147 stores in 15 Midwestern, North Central and Rocky Mountain states. ShopKo Stores, Inc. operates 158 stores in 19 Midwest, Western Mountain and Pacific Northwest states.

According to the release, Pamida's headquarters will remain in Omaha, Neb. ShopKo, a Fortune 500 company, is headquartered in Green Bay, Wis.

During the past 18 months, ShopKo has opened 28 new stores.