CORPUS CHRISTI, Texas -- Susser Holdings Corp. will accelerate its new retail store building program in 2012, with an estimated 25 to 30 Stripes convenience stores expected to be built next year.
"Our plan to pick up the pace of new store building next year reflects the strong traction our Stripes brand has achieved in the markets where we compete and the strength of the Texas economy," said Sam L. Susser, president and CEO. "By accelerating our organic expansion and continuing to invest in our land bank, we are building a strong base for long-term growth, and we believe we will be creating important value for our company today and for the future."
Susser expects its annual rate of new builds to grow from 19 or 20 stores in 2011 to 25 to 30 new Stripes convenience stores in 2012.
"The Texas economy continues to outperform the rest of the nation, and we feel very fortunate to be firmly established and positioned in a state and region that is clearly in expansion mode," Susser said. "During the past year, we built an inventory of attractive real estate for new sites, and today we are in a position from a land-bank standpoint to significantly increase our rate of new store growth."
Each new store will include the proprietary Laredo Taco Co. restaurant, which has been a major driver of same-store sales growth since the concept was initiated in 2001.
"The new stores we are building today are typically 4,900 to 6,800 square feet, twice as large as our legacy model, and they have typically delivered two to three times the cash flow of older stores built prior to 2000," Susser said. "Their strong financial performance is a key driver behind our new-store construction program that actually began accelerating in late 2010. We expect our typical big-box store to mature in about three years, and our target is a 20% unlevered annual return on investment.
Since its initial public offering in late 2006, Susser Holdings has grown from 325 retail stores in South Texas and southern Oklahoma to a total of 539 today, including 59 new builds and 185 acquired stores.
In addition to its retail store expansion, Susser also expects to add 25 to 35 new contracted dealer sites to its wholesale business during 2012 to be supplied by its Susser Petroleum subsidiary.
Also yesterday, Susser Holdings Corp. announced that it has commenced an underwritten public offering of approximately 3.5 million shares of its common stock.
In connection with the offering, Susser will grant the underwriters an option to purchase up to 525,000 additional shares. Susser intends to use the net proceeds from this offering for growth capital for new-store development and general corporate purposes that may include opportunistic debt reduction, from time to time, based on market conditions.
BofA Merrill Lynch is the sole book-running manager for this offering. BMO Capital Markets and Morgan Keegan are acting as joint lead managers for the offering. RBC Capital Markets and Wells Fargo Securities are acting as senior co-managers for the offering. Imperial Capital and Sidoti & Co. LLC are acting as co-managers for the offering.
Corpus Christi, Texas-based Susser Holdings Corp. is a third-generation, family-led business with approximately 1,100 convenience stores in its network. The Company salary-operates 539 convenience stores in Texas, New Mexico and Oklahoma under the Stripes banner.
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