As ShopKo sales soften, recruitment picks up

DSN Retailing Today, April 21, 2003 by Laura Heller

ASHWAUBENON, WIS. -- The management reshuffling at ShopKo continues even as sales remain on a downward trajectory. But new president and ceo Sam Duncan has been putting a positive face on the company while making dramatic changes at corporate headquarters.

ShopKo is two months into its new fiscal year and sales have not been positive. For the nine weeks ended April 4, 2003, comp-store sales declined 5.3% for the total company, 6.3% at the ShopKo division and dropped 2.3% at Pamida. For March, sales plummeted 10.1% at ShopKo stores, but were affected by the Easter holiday shift and difficult comparisons to a comp increase of 10.2% for the same period the year before.

Pamida's comps declined 2.7% in March, compared to just a 0.2% decline for March 2002. For the fiscal year 2002, Pamida posted a 4.8% comp-store decrease while overall sales declined 6% to $784 million for the year.

But Pamida posted positive earnings of $ 11.256 million for the year, following a $12.7 million loss the year before, and Duncan is singing Pamida's praises.

"We are pleased to report that the company delivered solid results, reflecting a significant improvement in our Pamida division," he said, following the release of year-end results. "This was despite the challenging economic and retail environment which continued throughout the fourth quarter."

In fact, the unofficial word from ShopKo's Green Bay headquarters is that Pamida may actually be turning the ever-elusive corner to profitability after two years of negative sales. Pamida president Mike Hopkins and his team have been working to put the division back on track by reducing expenses, reworking merchandising and promotional programs appropriate to Pamida's rural markets, adding consumables and pharmacy and consolidating some corporate functions with ShopKo's in Green Bay.

Questions remain as to Pamida's future, particularly how long the company can operate two separate headquarters and whether or not ShopKo has been trying to divest itself of the Pamida division altogether. In spite of changing management, the company's position on these subjects has never wavered, and the public position is that operations will remain separate. Finding a way out of Pamida has not been addressed and the possibility highly unlikely until the chain shows stronger signs of recovery.

Duncan continues to bring in fresh faces. But while they may be new to Green Bay, more than a few hail from Fred Meyer, which is where Duncan previously served as president.

Dan Bolstad joined ShopKo as senior vp of store operations and logistics functions from Fred Meyer in February, and two more former Fred Meyer employees were hired at ShopKo this month. Paul Hertz has been named ShopKo division vp of process improvement and resource management. He was formerly regional vp for Fred Meyer in Salt Lake City Larry Gentry has been named vp of Shopko division store operations, assuming responsibility for the management and operation of all ShopKo stores with all regional directors reporting to him. Gentry spent 27 years at Fred Meyer, most recently as senior vp of the operations group.

Duncan snagged Mary Ellen Martinson from Target to be the new divisional vp of accessories, intimate, fine jewelry and watches, and Sam Martin has been named vp of distribution and transportation. Martin most recently served as vp, Western region sales and operations at Toys "R" Us. Prior to that he worked at (drum roll please ...) Fred Meyer as regional vp of store operations.