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    An Uncertain Future Looms for Some Alon USA Stores

    Skinny's locations in Waco, Texas, cannot be branded 7-Eleven and must be divested.

    DALLAS -- Last summer, when Alon USA Energy Inc., operator of more than 300 convenience stores based here, completed the purchase of Skinny's Inc. and its 102 Skinny's c-stores, Alon president and CEO Jeff Morris announced that the stores, operated under its subsidiary Southwest Convenience Stores, would be rebranded to 7-Eleven in an effort to secure the company's title as the largest 7-Eleven licensee.

    Now, the rebranding plan for some Skinny's stores in Waco, Texas, has hit a snag as it turns out Southwest Convenience Stores is not licensed to develop, build or franchise the 7-Eleven brand in the town, according to 7-Eleven spokeswoman Margaret Chabris.

    "We never granted Southwest Convenience Stores the Waco territory," Chabris told CSNews Online. Waco, Texas, is between Hillsboro and Austin, Texas, and the company is not licensing or developing that area, according to Chabris.

    "There was a discussion [on whether] we wanted to grant them that geography," she said, noting that the question came up eight months ago when Alon closed on the purchase. "We decided no. We don't want two companies running stores so close together."

    Therefore, the Waco stores will not be branded 7-Eleven, and 7-Eleven has no plans to develop stores in Waco, Texas, at this time, Chabris said. "We have told [Alon] they need to divest the Waco stores included in the purchase," she explained.

    7-Eleven is concentrating on areas where it has a larger number of stores, and she noted the company recently converted two locations in Austin, Texas, to the brand.

    7-Eleven's parent company, formerly known as Southland Corp., pulled out of the Waco area in 1988 when it sold 25 Waco 7-Eleven locations to its chief competitor, Circle K, according to a recent report by the Waco Herald-Tribune. Those 25 stores later became Skinny's locations, the newspaper stated.

    CSNews Online reported in early July that Alon USA had closed its $70 million acquisition of Abilene, Texas-based Skinny's. The acquired stores are 1,500 to 2,000 square feet with traditional offerings such as cold beverages, cigarettes and candy, Morris told CSNews. After the stores are rebranded to 7-Eleven and offerings such as Slurpees added, he said there could be the addition of foodservice.

    "We are considering adding a foodservice program to Southwest Convenience Stores, and would consider adding it to these stores as well," Morris told CSNews Online at the time. The company's current foodservice offering consists of supplier-provided sandwiches that can be heated at the store, Morris explained.

    Three weeks later, CSNews Online updated the progress. "We started the conversion almost immediately and are doing that over the next few months," Morris said, noting that the conversions would be completed in three to four months. "Right now, we have a lot of work at Skinny's bringing the Slurpee and Big Gulp (brands) into the stores."

    The current roadblock in Waco, Texas, leaves the future of the Skinny's stores in the area in question. Alon spokesman Blake Lewis told CSNews Online via e-mail, "Alon USA is continuing to evaluate business options for the Waco area Skinny's stores," and the company "has been working closely with 7-Eleven, and they have been supportive of our desire to find the best option for these stores and interested in our success in this situation, reflecting the great relationship that we enjoy with 7-Eleven."

    In other 7-Eleven news, the company announced that stores are offering a Valentine's gift to its racing fans. Starting today, participating 7-Eleven stores will offer a free poster to the first 25 customers purchasing Sports Illustrated's annual Swimsuit Issue.

    The 11- by 14-inch color poster features Andretti Green Racing team's Danica Patrick, as seen in the magazine's four-page spread. Danica is one of four Andretti Green Racing drivers and is sponsored by 7-Eleven Inc., according to the retailer.

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