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By Don Longo
LA PLATA, Md. -- The Wills Group's acquisition last week of 73 existing Shell-branded retail locations in Maryland -- through a joint venture with Shell-parent, Motiva Enterprises LLC -- is part of a nearly decade-long growth strategy by the fuel wholesaler to capitalize on the changing landscape of the petroleum retailing business.
"When I came to Wills Group in 2000, I sat down with Lock (Wills, president and CEO) and we could see what was going to happen with the major oil companies divesting their downstream marketing operations," said Mel Strine, now executive vice president of The Wills Group, and president of the company's Dash In, SMO and PEH subsidiaries. Strine and Wills saw an opportunity to grow the company's dealer network as more sites became available with Big Oil exiting the retail side of the business.
In 2000, the company, which was then supplying roughly 90 dealer locations, added 135 stores from Shell in the Delaware, Baltimore and southern Maryland area. Then in 2004, the company picked up more Shell locations, this time in the Richmond, Williamsburg and Tidewater, Va., areas, Strine told CSNews Online.
The latest acquisition, accomplished through the creation of a new LLC arrangement with Motiva (Shell), brings the company's total dealer locations to more than 300. The Wills Group also has 35 stores in its Dash In franchising program and owns two heating oil companies.
The joint venture hired Southern Maryland Oil (SMO) to be its joint managing operator. SMO will take advantage of its increased buying clout to handle purchasing programs for the dealers and branded franchise organization. Unlike the previous deals in which Wills purchased the Shell sites outright, this agreement allows Shell to keep one foot in the retail business through the joint venture.
The company announced it was immediately pumping $3 million into the acquired stores for new equipment to better serve the customer transaction process. This will include technology for PCI (Payment Card Industry) compliance and EPOS (Electronic Point of Sale) at the pump islands, Strine told CSNews Online.
Strine, who worked for Exxon for 23 years prior to coming to The Wills Group, said the company sees opportunities in today's market for growing both its dealer network, as well as its franchising program.
A new Dash In royalty program, unveiled in March, was met with dealer enthusiasm, according to Strine. "Franchising may be the wave of the future for the big boys such as 7-Eleven and Circle K, but not many privately held wholesalers can do it," he said. "It requires a lot of capital investment to create a proprietary brand. We are bringing the benefits of franchise programs, such as group buying, advertising and branding, to dealers who otherwise could not afford it."
The Dash In graphics program was redesigned in 2003-2004 to a more modern look, according to Strine. The store front incorporates a distinctive red-slash "eyebrow" leading to the Dash In logo with its signature time and temperature sign.
"It's a look that we can size and fit any configuration in the marketplace," said Strine.
The executive added that the company will continue to look for acquisition opportunities in its current mid-Atlantic market area -- which stretches from Virginia to Delaware. Despite a "lack of liquidity in the marketplace," Strine feels the company could double its current franchise store count within two to three years.
SMO Inc. Acquires 73 Shell Stations