SIOUX CITY — Bomgaars has begun the lengthy process of transforming its newly acquired Orscheln Farm and Home stores to Bomgaars locations.
The Sioux City-based farm and ranch retailer began switching Orscheln's point-of-sale systems -- the stores' cash-register terminals and computer systems, essentially -- over to Bomgaars' system this year, said Bomgaars spokeswoman Heather Korbe. That process is ongoing, at a rate of a few stores each week.
"We started to convert point-of-sale systems in the markets. We've got a schedule in place to get those done over the coming months," Korbe said. "We're working with local contractors in each market."
For the time being, the stores still have their Orscheln signage and branding, but that will soon begin to change. The stores will also be re-painted from Orscheln's signature color -- red -- to Bomgaars' signature green. Orscheln's private-label products will be swapped for Bomgaars' private-label.
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Switching out the signage is expected to begin "in the next several months," Korbe said.
"We're working with contractors and sign production companies in all of those markets to get all of that stuff transitioned. But that all takes time."
In what was termed a "mega-deal" in October, Bomgaars acquired 73 Orscheln Farm and Home stores, making Bomgaars the country's second-largest farm and ranch merchant, behind only Tractor Supply Co.
It was a complex transaction. Brentwood, Tennessee-based Tractor Supply had been seeking to acquire its rival, the Moberly, Missouri-based Orscheln, for more than a year but had run afoul of federal anti-trust laws.
The Federal Trade Commission approved the sale of 166 Orscheln stores to Tractor Supply for about $320 million on the condition that it immediately divest 85 of the stores to two third-party buyers -- Bomgaars and Buchheit Enterprises.
Buchheit, a farm retailer operating in Missouri and Illinois, acquired 12 stores as part of the transaction, and Bomgaars bought 73 stores. The remaining 81 Orscheln stores will be converted to Tractor Supply locations.
After those 73 former Orscheln stores are rebranded, the number of Bomgaars locations will swell to around 180 locations. Bomgaars added 1,400 workers to its payroll in the process, for a total employee count of about 3,300.
The deal facilitated Bomgaars' expansion into seven new stores -- Missouri, Oklahoma, Texas, Arkansas, Kentucky, Indiana and Ohio -- nearly doubling the retailer's sprawling territory to 15 states.
Proceeds from the divestitures totaled about $72 million, according to Tractor Supply. The publicly traded company agreed to sell Orscheln's corporate headquarters and distribution center in Moberly to Bomgaars for about $10 million.
Bomgaars' corporate offices and central warehouse and distribution center in Sioux City are at 1805 Zenith Drive. In 2015, the company completed a $17 million expansion of the distribution center, adding 150,000 square feet to nearly double its size. The facility is located near the intersection of Hamilton Boulevard and Interstate 29.
Orscheln's distribution center in Moberly has about 330,000 square feet of space. Korbe said Bomgaars will make use of this facility.
"That's all part of the schedule and the scope of this transition, flowing product through there and getting our product assortment set up with vendors to deliver to that distribution center, and then from that distribution center to service stores in those markets," she said.
Orscheln was founded in 1960 in by W.C. "Colonel" Orscheln, who opened his first store in Sedalia, Missouri, according to the retailer's website. The Orscheln chain grew more quickly than Bomgaars, reaching 85 locations by 2003.
Bomgaars traces its roots to William H. "Bill" Bomgaars, a Northwest Iowa merchant who struggled in various retail ventures in the opening decades of the 20th century before hitting upon a winning formula of selling farm supplies.
The fourth-generation family business is owned by Roger and Jane Bomgaars, who each spring “road trip” across the country to visit their stores. The couple said last year they are looking forward to visiting the 73 new locations as they travel the company's trade region.
