CEDAR RAPIDS, Iowa -- We were not on the market. An offer presented itself and we were compelled to look at it very hard.
So said Dave Nordstrom, president of Cedar Rapids, Iowa-based Nordstrom Oil Co., regarding an offer that led to the recent sale of his company's 33 HandiMart convenience stores. Ankeny, Iowa-based Casey's General Stores Inc. was the only bidder in the $63 million transaction, which had been fermenting for months, according to Nordstrom.
The sub-50-store chains are in a bit of an awkward place, Nordstrom told [image-nocss] CSP Daily News. It's nothing that hard work and paying attention to the game plan can't handle, but [the Casey's offer] was an offer that hit the right parameters for us. You have that combined with market conditions that influenced our decision. [Selling the stores] was not part of this year's strategic plan.
The Nordstrom family, which has been operating the company since the 1970s, is now free to pursue other business ventures lacking the volatility of the motor-fuels business. Hotels, coffeehouses and restaurant development will have the company's full attention once the transaction is finalized.
We kept our [Java Creek Caf a] coffee shop and one other restaurant operation, said Nordstrom. As part of our future plan, we signed a development agreement for Sonic Drive-Ins in northeastern Iowa. That was going to be new business arm of the company, so we'll focus more intently on that now. We're in the hotel business toowe have three hotelsso this will enable us to focus more on that part of the business.
Larger convenience retailers such as Casey's, Alimentation Couche-Tard, The Pantry and Kum & Go continue to grow by absorbing smaller players, and single-store operators are multiplying by purchasing cast-off stores that no longer fit into the plans of other retailers. Meanwhile, middle-of-the-road retailers with anywhere from 10 to 50 stores continue to feel the squeeze from both ends.
Executives at Waring Oil Co., Vicksburg, Miss., for example, felt they would have had to undergo considerable growth in order to excel in the current business environment. Instead, the company sold its chain of nearly 40 stores to The Pantry last December.
Our reasons for getting out of the [retail] business were mainly economic, Richard Waring, company vice president, told CSP Daily News. When the stars lined up, it was hard for us to not make that move [to sell our stores]. We were thinking if we were going to stay in this business, we would have had to double in size. [The executive team is] all in our 50s, so we weren't sure if we wanted to take that fight.
Like Nordstrom Oil, however, Waring Oil has plenty to keep busy in the wake of its departure from the retail fuel-marketing business. We've still got the wholesale side, supplying about 60 dealers, so that's where we're concentrating our energies, said Waring. It's a bittersweet deal for me because retail was all I lived. But now I'm learning a new business, so that's exciting for me.
As Nordstrom looks back on the legacy left by HandiMarts, he's reminded of what helped shape the chain into what he believes is the premier c-store in this part of state, if not in the entire state: the company's people. [Our success] was a product of the people who did most of the hard work making us a good company, he said. Great people have worked here, and that's what has me most proud of what we did with this company.
What was the hardest part about selling a storied chain in HandiMarts?
Same answerit's the people, he said. But Casey's is an Iowa company, has a good foundation and is in growth mode. They have had a strong desire to learn more about HandiMarts and not just [absorb it]. The HandiMarts name will live on, at least for a while.
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