MINNEAPOLIS (WCCO) — Mills Fleet Farm was founded by Stewart Mills Sr. in Brainerd back in 1955. The company steadily grew into a chain of 35 retail stores in Minnesota, Iowa, Wisconsin and North Dakota.
It gained retail success by appealing to both city and rural shoppers — a niche that other stores did not offer.
“The wide variety of things from housewares to farm to garden and auto,” shopper Tim Stanoch said. “Everything all under one roof.”
Despite the company’s 60 years of success, Mills Fleet Farm did not have the necessary resources to expand beyond the Midwest. That is why company owners decided the best thing to do was put the chain up for sale.
New York investment firm KKR announced Tuesday it had reached a deal to acquire Mills. But the challenge for KKR will be navigating the needed changes while not alienating the chain’s loyal customer base.
“They might want to bring in some different merchandise and get rid of some other merchandise, but it will probably stay pretty close to the same I would think,” shopper Larry Cardinal said.
Stewart Mills III told WCCO’s Pat Kessler recently that he was saddened by the family’s sale. Business experts say it is rare for a family business to maintain control beyond several generations.
Paul Vaaler is a law and business expert with the University of Minnesota. He says cheap money and solid growth is again fueling large mergers and acquisitions, much like during the late 1980s.
“In any kind of family corporation, the challenge is, ‘How do I find capitol?'” Vaaler said.
In a written release, Mills Fleet Farm said the sale to KKR will make possible an expansion beyond the Midwest.
“I think we’re going to find out at the end of the day that this is just one of these issues where the most recent generation isn’t interested in taking that company to the next level, and there are other people who do this for a living,” Vaaler said.
But from Fleet Farm parking lots in Minnesota, loyal customers have a bit of advice for the new owners in Manhattan.
“Don’t change it,” Stanoch said. “Keep it the way it is. It’s been good for a long time.”
KKR has some experience with retail; they are the owners of Toys “R” Us.
The Mills family will retain a small ownership stake in the company. Some Mills family members are even expected to maintain offices and work as advisers.