TEMPLE, Texas -- Strasburger Enterprises, operator of the Quix convenience store chain, will exit the company-owned side of the business by the end of this year with the goal of growing its site-management business.
The news comes on the heels of the company selling 23 of its stores in central Texas to 7-Eleven Inc., as reported in a Raymond James/CSP Daily News Flash yesterday.
"We do a contract-operations business where we run sites for other people, and that business is growing," Roy Strasburger, president of the international division for Strasburger Enterprises, told CSP Daily News. "And so we see ourselves as being a service provider in the upcoming years."
Strasburger said the company has another 10 sites that will be sold off individually.
"We're expecting to be completely out of the company-owned business by the end of the year," he added, underscoring, "We're still in the c-store business. We're not exiting the industry; we're just shifting our focus about how we go to market."
The strategy update follows changes within the c-store industry and the slow economy.
"We were in a situation where, with the network of about 30 sites, we were stuck in the no man's land of not having a large enough company-owned network to achieve economies of scale and not being small enough to be a really low-cost operator," Strasburger said. "And with the growth of our contract-management business, we decided we didn't want to take on more debt in this economic environment or put capital into more stores. So basically, we see our future as providing services to people who have retail sites but don't want to run them themselves."
The 23 stores sold to 7-Eleven are located across a swath of north and central Texas from Haslet in Tarrant County in the north to Converse, just east of San Antonio, in the south.
"We're in an area that is relatively under-represented by 7-Eleven," Strasburger said, "which is why we were an attractive fit for them."
The acquisition brings the number of 7-Eleven Inc. operated and franchised stores in Texas to 570.
"7-Eleven is continuing its accelerated growth, and this acquisition helps us meet the ambitious goals we have set," Robbie Radant, 7-Eleven vice president of mergers and acquisitions, said. "We met our goal of opening more than 600 stores in the U.S. and Canada last year, and are on target to surpass that number in 2012 and reach our goal of 630."
7-Eleven will start remodeling and rebranding the locations soon, with the bulk of the work anticipated to be completed by the end of 2012. The converted stores will offer 7-Eleven's line of daily-delivered fresh foods and bakery, proprietary 7-Select products, Big Bite hot dogs, other grilled and hot foods, Slurpee and Big Gulp beverages and standard grocery and convenience items. Stores will be available for franchise after they are remodeled.
"7-Eleven has extended job offers to qualified Strasburger employees who are affected by this acquisition, and we welcome them to the 7-Eleven team," Radant said.
Based in Dallas, 7-Eleven operates, franchises or licenses more than 9,200 7-Eleven stores in North America.
Temple, Texas-based Strasburger Enterprises Inc., through its subsidiary Convenience Management Systems Inc., provides professional site operations programs throughout the United States for convenience-store operators, fuel retailers, jobbers and financial institutions holding foreclosed operating assets. Strasburger provides a turnkey solution for property owners or developers who want the site profitability and margins of the fuel and/or convenience-store sector without the day-to-day responsibility for operations, regulatory compliance or employees.
Strasburger's retail division produced approximately $100 million in annual sales in 2011. Its retail stores are primarily owned in fee, Shell branded and located in high traffic areas along the Interstate 35 corridor between Dallas and San Antonio.
The deal with brokered by Matrix Capital Markets Group, Richmond, Va.