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Private label leads reset as ShopKo tweaks mix

Andrea Lillo -- Home Textiles Today, December 1, 2003

ShopKo's linens and domestics department — an "underperforming area" — was in transition during the third quarter as the chain worked to improve its mix, said Sam Duncan, president and ceo, during the company's third-quarter conference call last week.

The department beefed up the presence of its Northcrest Home private label brand to make a stronger value product statement and improved its seasonal cold-weather assortment. An increased inventory investment supports this revised assortment, he said.

The company has been pleased overall with the performance of its two ShopKo remodels, and five weeks after its opening, the Neenah, WI, store was trending 14 percent above the chain. The Ashwaubenon unit was performing well, but is contending with two Wal-Mart Supercenters and a major department store in the area that opened earlier this year. However, the remodel "helped this location maintain its sales trend instead of eroding as often occurs with such intrusion," Duncan said.

The third remodel was set to open Nov. 22 in Eau Claire, where ShopKo will build on the Neenah store's success and test new features, including a cyber cafe.

ShopKo will proceed with the remodels next year, and has earmarked $100 million for 10 remodels, as well as three ShopKo Express RX stores, 50 Pamida mini-remodels, 16 Pamida pharmacies, and equipping 56 ShopKo units with new check stands and 10 units with self checkouts.

The first three ShopKo remodels of the year will be completed in spring 2004 — two in Omaha and one in Idaho.

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