WESTLAKE, Ohio — TravelCenters of America Inc. (TA) has initiated a companywide reorganization, which it said is a key step in its strategic, long-term plan to improve operational efficiency and profitability. The plan includes leadership changes with the addition of new senior vice presidents for a newly created hospitality department, under which the company will consolidate the areas of convenience stores, restaurants and gaming. It also includes leadership changes in information technology.
- TravelCenters of America is No. 27 on the Top 40 update to CSP’s 2019 Top 202 ranking of U.S. c-store chains by number of retail outlets. CSP will release the complete 2020 list in June.
TA has appointed a new senior vice president of corporate development, a new department initially tasked with delivering on the company’s reorganizational initiatives. Key among these initiatives is the creation of a centralized procurement group to drive economies of scale in pricing, provide increased leverage in vendor negotiations and lead to purchasing savings and a streamlined operation. Other key initiatives focus on areas of opportunity for costs savings and increased revenues, including c-store merchandising, over-the-road delivery, truck repair training and staffing and IT systems.
The company's new senior leaders have decades of valuable experience as well as initiative, critical skills and new visions and approaches to critical but underperforming areas of TA’s business. In addition, as part of its reorganization plan, TA is reducing its corporate headcount by a total of approximately 130 and eliminating certain positions. The company said it expects the one-time cost associated with executing the reorganization plan to be approximately $4.2 million. It said it expects these changes to generate net annual savings of approximately $13.1 million in selling, general and administrative expense (SG&A).
In mid-April, TA furloughed approximately 2,900 field employees, as well as 122 corporate employees, as a result of the closures of its full-service restaurants, the company announced in a business update related to the COVID-19 pandemic.
“I believe that this plan will result in major changes in efficiencies and improvements to TA’s business and position it well for future success,” said Jon Pertchik, CEO of TA.
“Since joining TA in December, I, together with TA’s senior level management, and under the oversight and direction of TA’s board of directors, have been focused on developing a plan to cost-effectively optimize the strengths of our organization in order to transform the company,” Pertchik said. “By reorganizing and enhancing our leadership team, we have taken the first formal steps in executing TA’s turnaround by repositioning management, redefining management roles and operating focus, and strategically adding new management who bring new and valuable experiences, skills and outlooks to TA, while also focusing on right-sizing historical SG&A growth, which has significantly outpaced revenue growth over the past decade. I am confident that the team that we now have in place is the one to take TA forward.”
New senior leaders include:
- Kevin Kelly, senior vice president of hospitality (retail, restaurant, gaming). Kelly is joining TA from Delaware North, a global foodservice and hospitality company, where he held progressive leadership roles over the past 22 years. His most recent role was president of travel hospitality, in which he led a subsidiary consisting of more than 250 foodservice and retail locations in 19 airports and oversaw the construction of 120 locations.
- Dennis King, senior vice president of corporate development. An experienced commercial and strategy leader with a proven record of building high-performing teams and executing transformative change, King was most recently an associate partner at McKinsey & Co. He has more than 15 years of experience leading transformations in retail and consumer companies.
- Sandy Rapp, chief information officer and senior vice president of information technology. Rapp is an information systems and business executive with more than 30 years of experience in software development, consumer products, IT consulting, financial and manufacturing industries. Rapp most recently was chief information officer of the Timken Co.
Founded in 1972 and based in Westlake, Ohio, publicly traded TA has more than 260 travel centers in 44 states and Canada, principally under the TA, Petro Stopping Centers and TA Express brands. It offers diesel and gasoline fuel, truck maintenance and repair, full-service and quick-service restaurants (QSRs), car and truck parking and other services and amenities for professional drivers and the motoring public. TravelCenters of America operates nearly 650 full-service and QSRs and 10 proprietary restaurant brands, including Quaker Steak & Lube, Iron Skillet and Country Pride.