More Remodels On Tap For ShopKo

Joan Gunin, Michele SanFilippo, March 14, 2005

Green Bay, Wis. — ShopKo Stores, Inc. announced plans for additional store locations and remodels during its fourth-quarter conference call late last week.

The company's preliminary 2005 plans call for the following additions: 16 ShopKo remodels, 35 Pamida remodels and eight new locations, 12 Pamida pharmacies in existing locations, and up to three new ShopKo Express Rx stores in 2006.

ShopKo President and CEO Sam Duncan said that customers reacted favorably to the 10 completed store remodels in the ShopKo division in 2004 by finding the formats “modern and easy to shop.” Most of these stores experienced major post-remodel sales improvements, according to Duncan.

Of the 16 remodels planned for ShopKo this year, capital investment will be $1.2 million per store as opposed to the $2.2 million spent per store last year. New stores will focus on home textiles, décor and entertainment, as well as furniture, apparel and accessories. Adjacent departments to be emphasized are infant textiles, furniture and apparel.

“We have focused merchandising efforts on creating destination departments,” said Duncan, adding that the company also introduced new merchandise by Columbia Sportswear Bedding in linens and domestics to improve assortment and correct sales softness. “We will continue to introduce strong new merchandise to generate a sense of urgency for the customers,” he added.

Other strategies mentioned in the conference call included a planned reduction in promotional activity and improvement in inventory management.

In addition, the company will continue to invest in new technologies for pharmacy, store and merchandising systems — including the replacement of certain merchandising systems in the ShopKo division and replenishment systems in both ShopKo and Pamida divisions — replacement of the optical system in the ShopKo division; and pharmacy robotics at 12 ShopKo locations.

“In the future, we will continue to look for ways to use technology to gain efficiencies and reduce costs while improving service to our customers,” said Duncan.

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