Thorntons may have new ownership that includes a private-equity firm and a major oil company, but CEO Simon Richards is intent on preserving the brand’s marketing magic. In 2019, a joint venture formed by BP PLC and ArcLight Capital Partners LLC acquired the nearly 200 stores of Louisville, Ky.-based Thorntons, which for nearly 50 years operated as a family-owned business. Richards, with a 25-year history with BP and roles in everything from business development to mergers and acquisitions and refining, took on leadership of the chain post-acquisition with full appreciation of why the new owners decided to hang onto the brand.
“A big part of the acquisition logic was the power of the brand and the strength of Thorntons, and the culture, and the business it brings with that as well,” Richards says. “Maintaining all that is extremely important to us, and that’s part of the magic that makes us what we are. So, if you start chipping away at it, you can lose all of those pieces very quickly.”
It’s a mindset that will shape Thorntons’ growth in the year ahead. The chain, which was No. 38 in CSP’s 2019 Top 202 ranking of c-store chains by store count, has opened a half-dozen new sites since being acquired by the joint venture.
“The former owners have built a great land bank. That was part of the deal structure,” Richards says. “That enabled us to get a good jump-start and continue to grow the business, which is a key objective for the new owners.”
Organic growth took the lead at Thorntons when it was family-owned, and it likely will continue to be the primary route in the near term. This is partly because of the desire to protect its retail vision.
With acquisitions, “you end up living with someone else’s platform,” Richards says. “So is it more efficient? It’s often as efficient to build your own, then you get the platform layout, configuration, the access, the services and offers that you want. That’s definitely a key part of our growth strategy.”
Thorntons’ newest format measures about 4,400 square feet on a 1.5- to 2-acre lot to accommodate 24 fueling positions. Inside the store, foodservice is a central focus, with kitchens preparing burritos and sandwiches, plus a grab-and-go case, a large fountain and frozen drink offer, a beer cave and self-checkouts.
That’s not to say acquisitions won’t also be part of the mix.
“We got to where we are with Thorntons today through an acquisition process, so growing through acquisitions is definitely not off the table,” Richards says. “The right network and the right locations with the right attributes—we’d definitely be interested.”
Ideal prospects would offer locations that can accommodate Thorntons’ growing store footprints and that provide flexibility for future offers. Access and being on “the right corners and the right streets” is important, including where the sites are relative to Thorntons’ existing network and key competitors. “The core part of our offer is being fast and convenient for our guests,” Richards says.
Being able to support the Thorntons brand experience will ultimately determine which assets make the cut. “How do you find the right network that doesn’t have too many ancillary bits and pieces with it?” Richards says. “We’ll participate [in acquisitions], but we’ll be very selective.”
Thorntons has an “arm’s length” relationship with BP and ArcLight, Richards says, and it is being run as a separate company. However, in its new ownership, Thorntons has two very capable partners and a supportive bank group, Richards says.
“We can certainly leverage the balance sheet to go faster,” he says. “We can think about sources and uses of cash a little bit differently to the previous owners. Huge credit [goes] to the Thorntons family. They did a fantastic job of growing the business. We’re looking to build on that, and accelerate the pace.”