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CORPUS CHRISTI, Texas -- Susser Holdings Corp. is gearing up for a big growth year in 2012. It is embarking on an accelerated retail store growth plan and will be looking to expand wholesale opportunities.
The aggressive retail building program for 2012 calls for an estimated 25 to 30 Stripes convenience stores to be built and opened by the year's end, Chip Bonner, executive vice president and general counsel, told CSNews Online.
The new retail sites will be rising in Susser's existing markets, he explained, adding that the company has already purchased or is in contract to purchase the land at this time. As for costs, the price tag for each new site is estimated to be between $2.5 million and $3.5 million, depending on land costs, Bonner said.
In addition to these new builds, Susser will continue to look for wholesale opportunities in the Dallas/Fort Worth metropolitan area -- a part of Texas the locally based company recently gained a foothold in with its October acquisition of the assets of Community Fuels of Texas LP. Days after that deal grabbed headlines, Susser's CFO Mary Sullivan told attendees at the Imperial Capital Fifth Global Opportunities Conference in New York City that the company's holdings mostly centered around the Houston area, but Susser hoped to use its latest acquisition in the Dallas/Fort Worth metro area as "a springboard for additional growth in that area," as CSNews Online previously reported.
At that time, Sullivan explained that Susser had had no official guidance for its 2012 building program but that it would be more than 2011. As of early October, the company had 13 new Stripes convenience stores under construction and was on track to meet its 19- to 20-store goal.
Now, less than two months later, the c-store operator has a firm 2012 plan in place.
"Our plan to pick up the pace of new store building next year reflects the strong traction our Stripes brand has achieved in the markets where we compete and the strength of the Texas economy," stated Sam L. Susser, president and CEO. "By accelerating our organic expansion and continuing to invest in our land bank, we are building a strong base for long-term growth, and we believe we will be creating important value for our company today and for the future."
The new stores will be larger than the typical Stripes location and what Susser executives have referred to as "big box." Each store will include the Laredo Taco Co. restaurant, which has been a major factor in the retailer's same-store sales growth since 2001.
"The new stores we are building today are typically 4,900 to 6,800 square feet -- twice as large as our legacy model -- and they have typically delivered two to three times the cash flow of older stores built prior to 2000," Susser said. "Their strong financial performance is a key driver behind our new store construction program that actually began accelerating in late 2010. We expect our typical big-box store to mature in about three years, and our target is a 20 percent unlevered annual return on investment."
Susser also benefits from location, location, location. The Texas economy is growing and so is its population -- a fact that does not escape company executives.
"The Texas economy continues to outperform the rest of the nation, and we feel very fortunate to be firmly established and positioned in a state and region that is clearly in expansion mode. During the past year, we built an inventory of attractive real estate for new sites and today, we are in a position from a land bank standpoint to significantly increase our rate of new store growth," Susser said.
The company released its 2012 retail store building program estimates shortly after announcing it had begun an underwritten public offering of approximately 3.5 million shares of its common stock. In connection with the offering, Susser will grant the underwriters an option to purchase up to 525,000 additional shares.