SEYMOUR, Ind. -- “Players in the convenience store industry are getting bigger, more sophisticated and have a lot of capital,” Gary F. Myers, CFO of Kocolene Marketing LLC, said in announcing the sale of its 14 Fast Max Convenience Stores to Circle K.
"Late last year, our board of directors asked that we perform a SWOT (strengths, weaknesses, opportunities, threats) analysis on all of our business divisions," he said. That analysis led to the decision to sell the c-stores.
Kocolene Marketing, the retail division of Seymour, Ind.-based holding company Kocolene Development Corp., owns and operates 14 Fast Max convenience stores, 15 Smokers Host Discount Tobacco Stores and five Fast Max gas station, all in Indiana and Kentucky.
Alimentation Couche-Tard Inc., through its Mac’s Convenience Stores LLC subsidiary, acquired 13 company-operated convenience stores with motor fuel, as well as the underlying real estate at 12 of the locations, said Richmond, Va.-based Matrix Capital Markets Group Inc., which provided merger and acquisition advisory services to Kocolene.
Kocolene Development also owns and operates Ranger Enterprises LLC, a warehousing, trucking and logistics company. It is retaining the Smokers Host stores and Ranger division.
“The Ranger and Smokers Host models came back with favorable S.W.O.T. analysis results, but the Fast Max model did not,” Myers said. “Our convenience stores have very good real-estate locations, but the overall facilities are in need of capital infusion in the near future. Government mandates for healthcare, higher wages and data security will all be very expensive. Circle K has the capital and successful programs in place at their other stores which they could implement in ours. It’s a great fit for them, and for our people.”
Carrie Myers, Gary’s grandmother, founded Kocolene Development in 1938. Several family members have led the organization through the decades in the fuel business.
“Although we’ve always been in the fuel business, my late father once said to me, ‘There’s a time to buy and a time to sell. Some day you might feel that it’s the right time to sell this oil company and it is better to sell two weeks too soon rather than one day too late. You have to know when that time arrives and don’t let the ghosts of your grandmother and I stop you if you feel it’s the right decision'," Gary Myers said.
The leadership team at Kocolene believed that the timing was right since the division had experienced increases in sales and profits over the past several years, he said.
“We engaged the services of a leading industry intermediary, and early this year, the stores were put out for bid," Myers said. "We’re 100% employee owned, and we were 100% transparent with our team members.”
Management shared updates communicating the results of the S.W.O.T. analysis, the bid process and the decision to accept Circle K’s bid all the way to the store-level team members within the organization.
The company offered any team members who were affected by the decrease in store count either a like position or a fair severance package. Kocolene also funded the use of a staffing company to help with resume building and job placement.
“Circle K will retain a lot of our team members,” Myers said. “We think both sides will benefit; we have a lot of tenured, dedicated team members and Circle K has a rapidly growing, industry-leading organization.”
Kocolene Development is looking beyond retail. As reported in a 21st Century Smoke/CSP Daily News Flash, The five gas stations are up for sale.
“We will continue to grow the Smokers Host Discount Tobacco and Ranger divisions,” Myers said, “But we’re actively searching for another business model to acquire outside of retail.”
Circle K is a division of Laval, Quebec-based Couche-Tard. As of July 2015, Couche-Tard's network included 7,987 convenience stores throughout North America, including 6,556 stores offering fuel. Its North American network consists of 15 business units, including 11 in the United States covering 41 states (under the Circle K and Kangaroo Express flags) and four in Canada covering all 10 provinces (under the Mac’s and Couche-Tard flags).
Couche-Tard has just announced that is rebranding all of its convenience stores worldwide under a single, refreshed Circle K brand.
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