Full Circle K
Published in CSP Daily News
MACS becomes Mid-Atlantic brand developer for national chain
RICHMOND, Va. -- Not to be confused with the Mac's c-store brand also run by North American c-store giant Alimentation Couche-Tard, Mid-Atlantic Convenience Stores (MACS) has opted to go with Couche-Tard's predominantly U.S. moniker, Circle K, as its go-to c-store brand.
Formed just two years ago from a series of major-oil and private-chain acquisitions, MACS will become what it is calling a "brand developer" for the Laval, Quebec-based Couche-Tard, as reported in a Raymond James/CSP Daily News Flash on Wednesday.
MACS will have the flexibility to market and operate in four Mid-Atlantic states while wielding the power of the brand and its existing programs. It's a decision that allows the new chain to focus its energies on conversion logistics and territory development.
In an exclusive interview with CSP Daily News, new CEO Dan Pastor said upon reviewing its options, the chain felt it had two routes: proprietary-brand development and licensed branding. "We asked ourselves, 'What is a brand and do we want to do this on our own or with a partner?'" he said. "If we can form the right partnership, then that could work."
"There are more than 3,400 Circle K's in the United States, but this will be the first footprint of the Circle K brand in the mid-Atlantic region of the country," said Dennis Tewell, vice president of franchising for Circle K, a division of Couche-Tard."We are excited and proud to begin the growth in this market with MACS. They are a very talented and well-led group."
The discussions, which began in earnest late last year as the new executive team formalized, led the Richmond, Va.-based MACS to Circle K.
What may surprise many in the industry is how little presence Circle K has in the markets that MACS operates in, said Derek Gaskins, senior vice president of marketing and merchandising for MACS, noting a handful of locations in the metro areas of Baltimore, Washington D.C. and Richmond. The new development territory covers four mid-Atlantic regions including, Virginia, Maryland, Delaware and the District of Columbia.
Plans are to initially change over its company-operated locations, with options for its dealer network set to emerge over the coming weeks.
"We are based in growth corridors," Gaskins said. "When you look at both population density and people moving into the area, income levels, job factors ... it's is a very powerful region."
Another compelling factor was the deal struck regarding its brand-developer status. Calling the agreement "flexibility within a framework," it essentially allows MACS access to established Circle K programs with the ability to tweak or develop areas that MACS officials feel they can execute better.
As a bonus, MACS will be able to create stores that represent the best that the regionally focused Circle K has to offer, said Brad Williams, formerly with Cary, N.C.-based The Pantry and now senior vice president of operations for MACS.
"Many of these programs have not been rolled out nationally," Williams said. "We'll be able to take the new initiatives that have become popular in Phoenix and the West Coast and bring them all into the mid-Atlantic states in a big way."
The decision may lead many to wonder about the nature of the deal and what drove the tactical thinking. "I don't want there to be confusion," Pastor said. "We were not acquired by Circle K, nor do they have ownership. We are an independent company. We're now a regional developer for Circle K on an exclusive basis, so no one else can develop stores [in our area]."
Initially formed in mid-2010, MACS was created by the Greenwich, Conn.-based private equity firm Catterton Partners, which was intent on taking advantage of the fragmented c-store channel and its continuing consolidation.
In June 2010, MACS acquired a majority interest in Uppy's Convenience Stores Inc., Richmond, Va., and 170 c-stores and fuel stations from Houston-based ExxonMobil. Today, MACS is comprised of approximately 300 company-owned and dealer-operated retail locations throughout Maryland and Virginia, along with a wholesale, fuel-distribution network.
In April 2011, MACS held the grand opening of its new business-support center in Richmond. The 22,000 square-foot site consolidated four former headquarter locations into a single operations hub.
The leadership team building the MACS business officially began to assemble when Pastor arrived in April 2011. He brought with him more than 20 years of c-store, grocery and fuel-category experience, most recently at regional supermarket powerhouse Giant Eagle, Pittsburgh, and its c-store arm, GetGo.
Gaskins joined the organization in September of 2011, with over 15 years of retail experience in the fuel, convenience and grocery industries. At one point working with Pastor at Giant Eagle, Gaskins moved on to become vice president of marketing for NACS and still serves on its marketing and communications committee.
Williams then joined in February of 2012 after serving in the same capacity with the Pantry for several years. Additional executives include Don Bassell, CFO; Neil McCarthy, CIO; Chad Lusk, chief strategy officer; Tom Terry, general counsel; and Lynn Lambrecht, senior vice president of human resources, all of whom joined in the past year.
The team began exploring brand-development options in earnest in the fourth quarter of 2011. They pursued a two-pronged path: proprietary-brand development and a licensed-brand strategy.
Today, the company has 71 corporate locations, 230 wholesale dealer sites spanning Virginia and Maryland. The greatest concentration of sites is in Richmond, the Northern Virginia suburbs of Washington, D.C., the Maryland suburbs of D.C. and the Baltimore region.
For more details, look for the August issue of CSP magazine.