RICHMOND, Va. -- After 22 years in business, convenience-store chain Rennie Petroleum Co., Richmond, Va., filed for Chapter 11 bankruptcy reorganization this week.
Rennie, which started in 1985 with a single service station, now has 24 stores. In the mid-1990s, the company hit a peak of 40 sites, according to a report in the Richmond Times-Dispatch. The business will continue to operate as usual, and there are no plans to close stores, owner and CEO Donald J. Rennie told the newspaper.
"Weare optimistic that we will succeed [image-nocss] and emerge from Chapter 11 as soon as possible," Rennie said, adding that he regretted having to file for bankruptcy protection. Attempts by CSP Daily News to contact Rennie for comment were unsuccessful at presstime.
The company listed assets of $4.67 million and liabilities of $7.98 million. Liabilities include $3.76 million in unsecured, nongovernmental claims. The company listed its largest unsecured creditor as CITGO Petroleum Corp. of Tulsa, Okla., with a $3.3 million claim. Gross revenue last year exceeded $100 million.
In the bankruptcy filing, the company said its business changed for the worse in the early part of the decade. Major oil companies began selling gasoline to their own stations cheaper than they sold it to wholesale purchasers such as Rennie. To stay competitive, Rennie said, it lost 15 cents a gallon on sales and laid off staff, subleased stores and cut expenses.
Beginning in 2003, Rennie said, increased competition from rivals such as Sheetz, Wawa and Sam's Club resulted in reduced sales and profit margins. Cash flow declined while rents continued to rise, the company said. Gross profit from retail gasoline sales was down 60% last year from prior years, Rennie told the newspaper.
In the court filing, the company said it is locked into an uncompetitive fuel-supply contract. The contract also requires Rennie to pay credit-card fees that cost more than independent card services would charge.
The company also said it has been unable to secure financing to replace outdated and worn carwash equipment and has lost 40% of its carwash business, which provided a significant portion of the company's profit.
"The economics of the retail petroleum industry generally and this company specifically have changed in recent years," David K. Spiro, attorney for Rennie Petroleum, told the newspaper. "The goalis to adjust to those changes, return to profitability and develop a plan which will keep the company in business while generating the highest return to the company's creditors."
Rennie Petroleum has 24 retail locations, seven operated by Rennie employees and nine stores leased to tenants at locations where Rennie maintains control of the gasoline pumps and car washes. In eight others, Rennie has leased the entire operation, but delivers fuel. The company's car washes operate under the Extreme Touchless Wash banner.
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