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DURHAM, N.C. -- Navigating the ups and downs of convenience retailing is difficult during rocky economic times such as these. Doing it with mounting debt is nearly impossible, which explains why Swifty Serve Corp. has experienced a whole lot of ebb and not too much flow over the past few months. And it's getting worse.
Fuel has stopped flowing at many of the chain's 450 Swifty Serve, Country Cupboard and E-Z Serve convenience stores throughout Georgia and Florida. Suppliers recently cut off supply to 60 Georgia stores and at least 30 Tallahassee stores and company executives are trying to secure financing -- and there's no telling how long that will take.
As first reported by CSNews Online, many of the chain's gas pumps throughout Georgia and Florida were covered with yellow bags. Signs read "Sorry, out of gas." Metro Atlanta has been hit hard, particularly north Atlanta, which has the heaviest concentration of stations. Elsewhere in Georgia, pumps also have run dry. Stores throughout Mississippi and Kentucky are also affected.
Jeff Hamill, president and CEO of Swifty Serve, confirmed that the company is behind in its debt payments but hopes to resolve the situation soon. "We're working with our lenders," Hamill told the The Atlanta Journal-Constitution. "It's a matter of days."
Despite reports of looming bankruptcy, Hamill said the company hasn't filed for court protection. That prospect remains uncertain. "I don't have a crystal ball," he said. The chain, which also operates stores under the names Sav-A-Ton, Townstar, Pepco and Majik Mart, recently shuttered 70 stores. More store closings could follow.
Though Swifty Serve is among the top independent and private convenience store operators, the industry is fraught with competition from large chains that can charge less at the pump. "There's a lot of pressure on small chains like ours," Hamill said. "It's a difficult challenge to compete and survive."
The company was co-founded in the late 1990s by co-owners W. Clay Hamner and actor Wayne Rogers. Hamill, a convenience store veteran, took the helm last spring. He previously was vice president, store operations, for 7-Eleven Inc. Swifty Serve grew through a series of acquisitions to about 600 locations in the Southeast. The chain recently was ranked 24th in the Convenience Store News list of Top 50 Convenience Store Companies.
But growth and competition have led to Swifty Serve's financial woes. In recent months, Swifty Serve closed offices in Atlanta, Tallahassee and New Orleans.
"The company is definitely under distress," said Fitch Ratings analyst Warren Wells. "They have asked for forbearance from their debt payments."
Wells said the company, a large borrower, is not as forthcoming with information as Fitch would like.
Reports have surfaced suggesting the company could be seeking a buyer. The Toronto Star on Thursday reported that Alimentation Couche-Tard Inc., a Canadian convenience store chain that has made serious inroads in the U.S. Midwest., is interested in buying stores owned by Swifty Serve. Couche-Tard said last month it would continue to pursue an aggressive U.S. expansion.
At a Glance:
Swifty Serve Corp.
Headquarters: Durham, N.C.
CEO: Jeff Hamill, president and CEO
Brands: E-Z Serve, Swifty Serve, Country Cupboard, Sav-A-Ton, Townstar, Pepco and Majik Mart.
Sales: $1.3 billion in 2001
Markets: Alabama, Florida, Georgia, Kentucky, Louisiana, Missouri, Mississippi, North Carolina, Ohio, South Carolina, Tennessee and Virginia.
Employees: More than 4,100