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DALLAS -- White Hen's successful fresh food business was a key element in 7-Eleven's decision to acquire the franchisor of 261 convenience stores in Chicago and Boston, according to Joseph DePinto, CEO of the nation’s largest convenience store chain.
In an interview with CSNews Online yesterday, DePinto said that White Hen fits the three-pronged philosophy for growth instituted by the company's new executive team. The new growth plan includes acquisitions and mergers that make sense and fit strategically, organic growth through building new stores, and the company's business conversion program that invites selected independent c-store operators to join the 7-Eleven system.
"I'm excited to be in growth mode," said DePinto. "I've personally admired White Hen's fresh food business and we are really going to learn from their success."
DePinto also told CSNews Online that Nancy Smith, vice president of 7-Eleven’s Midwest division, has been named president of White Hen. Working out of White Hen's Lombard, Ill.-office, she will be in charge of the more than 400 7-Eleven and White Hen stores in the greater Chicago market.
Although the purchase of White Hen is 7-Eleven's largest acquisition since 1998 when it bought 132 stores from Christy's Markets in Massachusetts, DePinto is not worried about integrating the new stores and people into the Dallas-based giant. "We have several folks on our senior executive team with mergers and acquisition experience," he said. DePinto himself is no stranger to acquisitions. As the president of GameStop, he led the acquisition of Electronics Boutique, creating the largest video game retailer in the world.
"You have to be smart, disciplined, do your research and get to know what you are buying," said DePinto. After the acquisition, it's important to make the new company feel part of a larger family. "My experience with mergers is that you cannot over-communicate," he added. "White Hen has a really good team in place. We'll be talking with each of them to understand what they do and how they support the stores and any changes we make will be with both the associates and the customers in mind."
DePinto also took a few minutes to praise White Hen CEO Brandon Barnholt. "Brandon has been a joy to work with and he will be assisting Nancy in assimilating White Hen," said DePinto. "He's been a consummate professional."
White Hen has had a somewhat tumultuous past. The convenience store chain was hatched as a division of Chicago supermarket chain Jewel Food in 1965. In the mid-80s, employees bought out the company, and then in 2000, White Hen was purchased by Clark USA, a refiner/retailer operation. The retail operations, which were spun off as Clark Retail Enterprises, went on an expansion binge, growing to almost 1,300 c-store locations. Overexpansion and operational problems, however, drove the company into bankruptcy, forcing Clark to sell what was then considered its "crown jewel" -- White Hen -- to Angelo, Gordon & Co., a New York-based investment firm, and a group of company managers, including Barnholt. In an exclusive July cover story, Barnholt told CSNews that the retailer was "putting the pieces in place to move forward" with a newly aggressive expansion plan. Then, in August, the chain was purchased by 7-Eleven for a reported $35 million.
"White Hen has been through some volatility over the past several years," DePinto acknowledged. "We bring some stability to the table, along with an unbelievably strong infrastructure that allows us to distribute fresh products, such as baked goods and breads, pastry and milk, to our stores daily."
DePinto said that he wants to leverage 7-Eleven's "enviable" distribution network and RIS (Retail Information System) that can track product movement on a daily basis.
"Today's customer is extremely time-pressed," he continued. "Our industry has the ability to get them in and on their way quicker than anyplace else. The challenge is to provide quality products that are tasty and a good value to the customer."