Improved Interest

With $35-million loan, GPM is poised for refurbishments, acquisitions

Angel Abcede, Senior Editor/Tobacco, CSP

RICHMOND, Va. -- In a move that greatly improved terms of a credit facility obtained back in August, GPM Investments LLC announced a new $35-million arrangement with PNC Bank N.A. that matures in November 2016.

Last summer, GPM, which operates the Fas Mart and Shore Stop convenience chains, obtained a $50-million credit facility, of which $15 million represented an equity infusion. In a move led by new GPM CEO Arie Kotler—who aided the company when it initially came out of bankruptcy in 2003 and rejoined the company about three months ago—GPM was able to take the remaining $35 million and develop the new credit facility with Pittsburgh-based PNC.

 “It certainly increases cash flow when you improve the interest rate on $35 million,” David Eisenberg, president of GPM, told CSP Daily News. “It frees us to do more refurbishing and puts us in a position of strength for acquisitions.”

In a statement, Kotler said the Fas Mart and Shore Stop brands, with a combined 213 stores, have “tremendous potential both inside and outside of our core markets.”

While not indicating favor for expansion either within or beyond core markets, Eisenberg said the company has always believed in leveraging its existing team vs. going outside its “sphere of influence,” possibly requiring an additional office and more personnel. If GPM were to make such a move, it would likely be on a larger, 50-store operation, similar to its 2008 acquisition of the relatively distant Double Quick chain in the Blue Ridge Mountains of West Virginia.

“But between Connecticut, West Virginia, Virginia and North Carolina, there’s plenty of opportunity to make us a powerful, regional chain,” Eisenberg said. “We’re already strong; we want to be powerful.”

With the additional cash flow, the company can give itself a “brighter, more interesting look,” Eisenberg said, inclusive of new merchandise and food offers along the way.

Kotler said in a statement that new initiatives, such as a new coffee program called “Perfect Harvest” launched at both Fas Stop and Shore Stop chains earlier this month, are indicative of the direction the company is going. In addition, it recently completed an in-depth, customer research study in its core markets, which will lead to a new marketing campaign that will launch in the spring of 2012.

“Our customers will begin seeing innovative initiatives around our core service offerings that will both surprise and delight them,” Kotler said.

GPM Investments LLC is headquartered in Richmond, Va., and operates 213 convenience stores and supplies over 115 independent dealers in Virginia, Maryland, Rhode Island, Delaware, Connecticut, North Carolina, Pennsylvania, New Jersey and Tennessee.

Angel Abcede, CSP/Winsight By Angel Abcede, Senior Editor/Tobacco, CSP
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