Joe Juliano and his team navigate United Pacifıc’s growth and new brand launch
20 minutes from LAX, on Slauson Avenue and La Brea, the swoop of a gas-station canopy transforms the expected into the surprising. It’s part of an architecturally stunning convenience store and car wash that’s stylish and quirky, lavish yet streamlined, irresistibly aspirational while obviously too expensive to replicate.
When the Appel family sold this site in 2014, along with the rest of its formidable West Coast chain of 130 c-stores and gasoline stations—mostly traditional but with a few striking Mediterranean- and Wild West-themed gems—they put that vision on the line. Would the Slauson site be a harbinger or tombstone? Joe Juliano is planning for the former—with less drama, but more of a statement.
Relying on data, best practices and a palpable eagerness to run good convenience stores, Juliano, a former college football player, is tackling barriers of California regulation, land limitation and echoes of major-oil redlining with private-equity backing and a new team of industry veterans and up-and-comers.
The playbook is working. In his first drive at the c-store channel, the 38-year-old Princeton grad has claimed surprising turf. After just a year and a half, a combination of timing, connections and cash has produced a new industry player—United Pacific—and a 321-store company-operated network with enough momentum to emerge as the channel’s newest consolidator.
“I’m still shocked at how the stars aligned,” says Juliano, now United Pacific’s CEO, sitting in an office of mahogany desks and bookshelves filled with photos of his son and daughter and mementos of a life in wholesale fuels.
In an exclusive interview with CSP, Juliano outlines a private-equity growth course that is quite different than that of Texas stalwarts CST Brands and Energy Transfer Partners. He is comfortable playing exclusively west of the Rockies and sees value in the small footprints that dominate his existing portfolio. That’s because many regional, new-to-industry c-store powerhouses see little promise in California today, especially in its dense urban areas, which are notoriously fraught with obstacles.
“It’s a typical, development-restricted market redlined by the oil companies for so many years, no marketer or jobber could build new stores,” says Jim Fisher, CEO of Houston-based IMST Corp. “So the only thing done was direct-dealer locations. But looking at the price of entry today, the inherent cost is prohibitive.”
Leading-edge operators want to enter markets where they can dominate, Fisher says. They don’t want to struggle with building permits or unsupportive community and government agencies, and potentially pay higher labor costs, taxes or real-estate prices.
Longtime Bay Area retailer Tom Robinson, president of Robinson Oil Corp., Santa Clara, Calif., agrees, but cautions not to paint the Golden State with a broad brush. “There’s no doubt California has significant barriers to entry, and particularly in more urban areas,” Robinson says. “At the same time, there’s a lot of California that is not as urban, so there’s no reason you couldn’t put a bigger-footprint [store] in those areas.”
Even in more urban centers, Robinson says, “We’re seeing the likes of Costco or Safeway expanding in urban markets … in the middle of good retail areas.”
In many ways, these barriers make Juliano’s gambit interesting and lucrative. He is backed by New York-based Fortress Investment Group’s deep pockets, and in a relatively short period he has put together a strong operations and category-management team that features veterans with tenures at Circle K, The Pantry and Fresh & Easy. Juliano is also reaping historic fuel margins and impressive yields on tobacco.
In short, he says, “It’s a nice recipe for success.”
The Slauson store is a symbol of where things began with the original United Oil, what Juliano affectionately calls “the crown jewel of Southern California.” His history in Orange County and having known Jeff Appel, United’s former vice president, played critical roles in building the trust Fortress needed to snag the reported $500 million sale of Gardena, Calif.-based United. (Though the amount was undisclosed, a financial source who spoke to CSP on condition of anonymity says that was the initial asking price.)
Just months later, United would draw attention in one of the biggest acquisitions of 2015.
The company's acquisition team had heard rumblings about turmoil at Pacific Convenience & Fuels (PC&F), a growth-minded chain with 251 stores based in Pleasanton, Calif. Though PC&F was not officially on the market, United became part of acquisition discussions—and last summer closed on a deal for an undisclosed sum.
“We were very popular at the NACS Show,” says Doug Hecker, vice president of marketing for United Pacific and one of Juliano’s key retail veterans, who spent more than a decade at Circle K. “Vendors saw new potential with us as low-hanging fruit.”