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DALLAS -- 7-Eleven Inc. closed on the acquisition of New England Pantry, operator of 58 convenience stores under the White Hen Pantry brand, from affiliates of Sanders Morris Harris Group Inc., a Houston-based wealth management firm.
The acquisition brings the number of outlets 7-Eleven operates and franchises in the market from approximately 120 to more than 170, according to 7-Eleven.
"7-Eleven already held the master license for these stores when we purchased White Hen Pantry in Chicago in 2006. However, they still were a part of [Sanders Morris Harris'] portfolio," 7-Eleven spokeswoman Margaret Chabris told CSNews Online via e-mail. "It was a good, strategic fit for us to acquire and rebrand these stores."
She also noted the purchase makes the Boston market the 12th largest for 7-Eleven, up from 17th. The acquisition is part of a multi-pronged growth strategy that includes individual store development, acquisitions and its Business Conversion Program, which is anticipated to support 50 percent of 7-Eleven's growth, Chabris said.
"This acquisition is part of our growth strategy, which includes expansion in existing markets that are profitable and already have a significant number of 7-Eleven stores," she said, noting there will be additional announcements of store expansion plans, which will follow specific growth plans previously announced in major metropolitan areas coast to coast.
As reported in a CSNews Online Breaking News Alert yesterday, the company anticipates that White Hen Pantry-branded stores will begin converting to the 7-Eleven brand in 2010. As for other changes, Chabris said it was too soon to tell whether or not 7-Eleven would take similar actions to its 2006 acquisition of Chicago's White Hen Pantry, where the Dallas-based chain kept popular elements of the brand in its stores, such as some fresh food items.
"It is our intent to blend the best of both, yet do remodels to accommodate 7-Eleven programs and proprietary products, [such as ] grills for Big Bite Hot dogs and Go-Go Taquitos, Slurpee and Big Gulp machines and new coffee islands," she said.
This week, 7-Eleven is meeting with the White Hen franchisees to discuss franchising opportunities, Chabris said. All but one of the 58 stores are franchised, and 7-Eleven plans for all the stores to be franchise operations.
"We'd like each current White Hen franchisee to apply and go through the 7-Eleven franchise qualification process," Chabris told CSNews Online. "Because most of the stores already are franchised, the current store employees could continue working with their respective franchisee."
As a result, White Hen Pantry CEO Andy Brothers joined 7-Eleven's management team and will support the transition.
"The acquisition of New England Pantry by 7-Eleven will provide our customers, franchisees and employees with additional opportunities by joining the leading convenience retailer's store network," Brothers said in a statement. "Franchises will be able to capitalize on 7-Eleven's brand strength, extended line-up of proprietary and private label products, and proven business system."
The New England Pantry management team, including Brothers, will continue to work out of its Norwood, Mass., office, according to 7-Eleven.
"This acquisition significantly strengthens our convenience offering in greater Boston," Bob Cozens, vice president for 7-Eleven's Northeast Division, said in a statement. "White Hen Pantry has a 40-year history of providing good customer service and high-quality products to consumers in the Boston area and we want to continue that tradition."
Financial terms of the transaction were not disclosed by 7-Eleven.
In other 7-Eleven news, the convenience store retailer will expand its test of selling wrapped single bananas from more than two dozen stores in the Dallas area to c-stores in Florida and Southern California, ThePacker.com reported.
A 60-day test of the bananas, supplied by Del Monte Fresh Produce N.A., concluded earlier this month, Chabris said in the report.
"The initial test was in just 27 stores near our office, so our management team could keep an eye on how they were doing," she said. "We can say that we were pleased with the results and want to validate those results by expanding to other areas."
The next phase will include 120 stores in Florida, she said, and a yet-to-be-determined number of stores in Southern California.
The bananas are delivered in a plastic film developed by Del Monte, which reduces bruising, controls ripening and extends shelf life up to five days, Dennis Christou, Del Monte vice president of marketing, told the Web site when the Dallas area testing began.
The single bananas "give significant advantages to the convenience store operators by ensuring that they have an optimal quality product that lasts longer and reduces their overall costs," he said at that time.
If the results of the test are positive, the company plans to launch the program on a region-by-region basis in the U.S. before the end of 2010, Chabris said in the report. The convenience store chain expects to sell more than 27 million bananas this year, up from 19 million bananas in 2007, according to company projections cited by ThePacker.com.
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