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HUDSON, Ohio -- The remains of Dairy Mart Convenience Stores Inc. will likely fade away over the next 60 to 90 more days, said Greg Landry, president and CEO of the bankrupt corporation.
At that time Alimentation Couch-Tard Inc., the Canadian retailer that wrapped up its acquisition of 287 Dairy Mart stores for $79.5 million earlier this week, will begin introducing its strategy for the embattled chain. Part of that strategy is to sell or close 150 underperforming franchise stores, which Couche-Tard will manage over the next 12 months, and could end up purchasing.
And while the Dairy Mart name will live on, it appears likely ? but not definite ? that the company's Hudson headquarters will close in about six months' time. More than 100 jobs could be lost, according to the Akron Beacon Journal.
Under terms of the deal, Couche-Tard bought most of Dairy Mart's assets, including the name, but it didn't buy the corporation. The acquisitions help end a troubled chapter in Dairy Mart's long history, which dates back to 1939 when J.J. Lawson opened a small store at his Broad Street dairy plant in Cuyahoga Falls.
Dairy Mart fell from the high of some 1,400 stores in 11 states in the early 1990s to the low of filing for bankruptcy earlier this year. Along the way, a mountain of debt created by its rapid expansion, highly publicized management and shareholder fights over the best way to run the company, and growing competition eventually did it in.
Fortunately, for the sales clerks and other field personnel, their jobs appear safe. About 3,900 of Dairy Mart's approximately 4,000 employees, mostly store-level, were retained by Couche-Tard. But only 10 of the 125 staff members at headquarters accepted job offers, according to the Beacon Journal.
Couche-Tard said it plans to move accounting and most other corporate functions to Columbus, Ind., home of its Mac's Convenience Stores LLC subsidiary, keeping a much smaller regional staff in Ohio, Landry said. Couche-Tard offered jobs to a majority of people at Hudson headquarters, but they would have had to relocate to Indiana, he said.
Landry, who guided Dairy Mart through its bankruptcy, said he will not be among those staying with Couche-Tard. Instead, he will remain until the Dairy Mart bankruptcy liquidation is completed, he said.
The future of the modern, 47,000-square-foot Hudson headquarters, which opened in 1997, appears to be in limbo, at least for now. Landry told the Beacon Journal it was his understanding that Couche-Tard would not renew its six-month lease on the headquarters.
But that's not necessarily so, said Richard Fortin, Couche-Tard's executive vice president and chief financial officer. If Couche-Tard can successfully negotiate with the building landlord, it will retain the Hudson space for some operations, he said. "We need a strong operations regional office," he said. "There's no reason it can't stay in Hudson."
No matter what happens with the headquarters, Couche-Tard intends to pump much-needed money into Dairy Mart stores. Fortin said his company is planning to invest between $50,000 and $75,000 per store in upgrades, starting with 15 stores this year and many more in 2003. That amounts to as much as $21.5 million when applied to all 289 stores. Fifteen Dairy Mart stores will be converted this year to what Couche-Tard calls its "Store 2000" concept. That involves upgrading stores to meet neighborhood needs with fresh products and traditional convenience store items.
Couche-Tard's aggressive expansion into the United States began in 2001, and with its Dairy Mart acquisitions it now has 545 stores in the Midwest. All told, Couche-Tard has 2,245 stores in Canada and the United States, and 17,200 employees.
ABOVE: Dairy Mart's 47,000-square-foot headquarters in Hudson, Ohio, will likely be sold following Alimentation Couche-Tard's acquisition of the company's assets.