WEST DES MOINES, Iowa -- With a focus on building larger-format stores while divesting smaller units, Kum & Go LLC said Thursday it plans to sell 21 Kum & Go convenience stores at auction. As reported in a CSP Daily News Flash yesterday, Kum & Go said it will sell 12 of its Iowa-based locations—mainly in rural areas—and another nine stores, three in South Dakota, two in North Dakota and one each in Missouri, Montana, Nebraska and Wyoming.
Last August, Kum & Go embarked on a strategy to divest smaller locations outside its core markets to focus on what it calls "[image-nocss] larger format" c-stores in core markets. The average footprint of stores being divested is around 2,000 sq. ft., while stores being built are about 3,500 sq. ft. in size. The larger stores will typically provide additional convenience offerings for customers, including quick-serve restaurants, Sara Wille, a spokesperson for Kum & Go, told CSP Daily News.
None of the units for sale have any foodservice profit centers attached to them, Wille said.
Regarding the building of new stores—the capital outlay of which Kum & Go would not reveal—Wille said so far this year, the retailer has christened seven new locations (in Oklahoma, South Dakota, Colorado and Nebraska), and plans to build 27 additional stores by year's end or into early 2009. The additional stores will be scattered throughout core markets in the 12 operating states. Three markets include Brighton, Colo., Springfield, Mo., and Omaha, Neb., said Wille.
The Iowa retailer would not provide details of the asking price for the 21 departing stores—either individually or as a group—said Wille. She added that the stores are all considered profitable. "We think they will be attractive to buyers whose niche happens to be smaller markets, as many stores are in rural communities—off the beaten path."
Ranked the 21st largest convenience store chain in the U.S., Kum & Go is focusing on developing better efficiencies of its retail infrastructure as well as creating a stronger asset base, said Kyle J. Krause, president and CEO of Kum & Go.
In a press statement, Krause said that Kum & Go is "committed to carefully planned, strategic growth leading in the direction of making Kum & Go the No. 1 convenient retailer. It is our desire to consolidate and strengthen our asset base and offer a consistent brand to our customers in Kum & Go's core markets. The sale of these properties is a step in the right direction for our company."
The company has retained Chicago-based The Energy Exchange to coordinate a sealed-bid auction. Kum & Go tapped The Energy Exchange to act as its intermediary in 2007 when the West Des Moines, Iowa-based retailer jettisoned 13 stores.
With a June 24 deadline, prospective owners may bid on one, multiple or all locations. Those wishing to obtain a list of the available stores can contact The Energy Exchange at (866) 906-7499.
According to Mark Raccuia, executive vice president of The Energy Exchange, "These stores are located in smaller cities and towns, and present ideal opportunities for individual owner-operators as well as first time operators to purchase profitable convenience stores and run their own business."Kum & Go has more than 430 corporately owned and operated c-stores in 12 states (Iowa, Arkansas, Colorado, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Wyoming and Wisconsin).