The Kotler Effect
With more than 600 stores now under its watch, GPM Investments lets the industry know it’s here to stay.
It’s not bravado—well, maybe a little bit—but Kotler and his team have clearly defined themselves as an acquisition company, one with a great variety of store size, designs and layouts. Never, Giacobone admits, are all GPM stores going to fit a certain template or prototype.
“You look at a company like Wawa—they have to build because they have a very specific size and footprint,” he says. “They can’t buy 30 stores and reconfigure them to fit that footprint; they have to build from the ground up. Us, we’re not ever going to be what they are, and that’s OK. Instead, we can win customers by competing on fuel, customer service or selling items that they don’t.”
Still, a flagship Fas Mart store is under construction in Richmond, Va. “We are doing it because we own the site,” Kotler says. “But we will not go and look for a vacant corner. It’s a special situation.”
Instead, Kotler will continue to focus on acquisitions. Portfolios of c-store chains on the real estate market are stacked all around Kotler’s office, on his desk, a conference table and chairs.
Kotler and Giacobone say they review possible purchases “every day.”
“We look at anything that’s on the market,” Kotler says, becoming more animated as he talks. (“Arie lights up the most when he talks about ‘the deal,’ ” Welsh correctly points out.)
“However, I want people to understand: We are eager to purchase, we are capable of purchasing, but we are going to buy smart,” Kotler says. “I can’t tell you how many calls I got while we were working on [the VPS deal]; everyone thinks he’s the next one [we’re going to buy]. Anyone can be the next one if it’s in our region, in our territory. Consolidation is important, and as I said, it has to make sense financially before we even look at it.”
Others have noticed GPM’s “aggressive reserve” as well. “Historically, they haven’t been willing to pay some of the prices that some of the others have paid,” says the financial insider. “My sense is that they’re not willing to pay the multiples that some of the others are willing to pay.”
But if things go Kotler’s way, GPM Investments’ momentum will continue.
“We have control of 615 sites; we operate in 12 states,” he says. “We’ve got a team that works 24-7. And the objective is to grow the company. In two years, we doubled the size of this company, and hopefully in two more years, we can do it again."