LYCOS RETRIEVER 
Shopko Stores: Companies
built 643 days ago
BACKGROUND: ShopKo, a regional retailer, operates nearly 150 stores in 16 states. The company carries branded and private-label goods such as women's, men's and children's apparel, shoes, jewelry, cosmetics and body care. It ... carries housewares, small appliances, furniture, music/videos, toys, sporting goods and seasonal goods. ShopKo's health services unit, ProVantage, provides pharmacy and optical management services and health decision support services.
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Retail health care was perceived as a particularly important growth opportunity for ShopKo. As a complement to its existing pharmacies and vision centers, the chain created ProVantage, a mail-order pharmacy and prescription benefit manager, in 1993. This new business was created to capitalize on an early 1990s trend that saw health insurance companies and health maintenance organizations contracting out many functions in order to streamline their own operations. ProVantage performed claims and benefit processing, management, and administration. Initially focused on prescriptions, ProVantage added Vision Benefit Management Service by mid-decade, soon boasting a network of 4,500 eye care providers. Encouraged by the new venture's rapid growth--ProVantage revenues totaled $14 million by 1995--ShopKo acquired the Bravell claims management company, including a network of 40,000 retail pharmacies, in 1995 and acquired the vision benefit management division of United Wisconsin Insurance Company in 1996.
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Bettiga said ShopKo Express Rx offers a merchandise mix with a greater emphasis on food than some of its competition. In addition to the business center, the pharmacy carries some electronics, traditional health and beauty aids, greeting cards, seasonal products, and one-hour photo. All of the new stores have a drive-thru. The company has decided not to carry toys and gifts. "We are going to focus on the types of items you would need for a fill-in trip and make the store accessible and convenient for customers in those areas," explained Bettiga.
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ShopKo's new merchandising strategy could be characterized as the antidote to Wal-Mart. As CEO Kramer told Discount Store News in 1993: "the chain is not looking to offer its products at the lowest prices, but [to] offer the best quality product at the lowest price available." ShopKo strategists surmised that this tactic would not only sidestep competition with Wal-Mart, but would ... prove to be the discount industry's primary area of growth. ShopKo avoided Wal-Mart's strongholds, instead focusing on five product groups: fashion, home, health, seasonal, and everyday basics. Within these broad categories, the company emphasized the hottest lines, which in the early to mid-1990s included: housewares, bed and bath, casual furniture, special-sized clothing, and intimate apparel.
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This lease transaction, which covers 112 ShopKo stores and 66 Pamida locations, gives the company the cash to explore expansions and remodels. The deal ... raises the profile of Arizona-based Spirit, a net lease financer and investment firm that was formed in 2003 and went public as a REIT in late 2004. Including the current transaction, Spirit has closed $2.5 billion in deals since its formation.
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May 2007: Ground breaking begins on a new 80,000 ft.2 Shopko store on 2318 Lineville Road in Suamico, Wisconsin. A new Shopko logo is introduced and will appear on advertising the following Sunday. The new logo will replace the logo used since 1992 and will be easier to read. The new design will appear on 28 existing stores and the corporate headquarters by the end of July. The company ... dropped the upper case K in its logo.
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