7-Eleven Hopes It Plucked a Winner in White Hen Acquisition

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7-Eleven Hopes It Plucked a Winner in White Hen Acquisition

CHICAGO -- Will 7-Eleven's iconic Slurpee be sold at White Hen? How about White Hen's "Hot & Fresh" sandwiches at 7-Eleven?

Well, both could eventually happen as the industry's largest convenience store chain and its newly acquired Chicago-based franchiser share best practices in the coming months. However, for the immediate future, consumers are not likely to see any changes at either of the two well-known convenience store brands, according to 7-Eleven spokeswoman Margaret Chabris.

As reported Friday, 7-Eleven made its largest acquisition in 20 years, purchasing the Lombard, Ill.-based White Hen Pantry. White Hen operates and franchises 206 stores in Chicago and Northwest Indiana, and licenses another 55 in Boston. Reuters reported that 7-Eleven paid $35 million for the chain. Morgan Keegan & Company Inc. served as advisor to White Hen and its owner, Angelo, Gordon & Co., a New York-based investment firm.

Chabris told CSNews Online that 7-Eleven has been interested in White Hen for a number of years and that discussions with White Hen's owners have been ongoing for the past year. She said that White Hen's long-respected foodservice business was attractive to 7-Eleven, and that the larger chain's best practices, such as its retail information system, its distribution system, particularly for fresh foods, and proprietary products such as the 7-Eleven Big Gulp, could benefit White Hen operators.

"Nothing will change immediately," she added. 7-Eleven officials will be meeting with White Hen personnel and store operators over the next two weeks. No decisions regarding name plate changes, consolidation of corporate offices, and the like have been made yet, she emphasized. White Hen stores will continue to operate for the near term as they have. 7-Eleven's local offices are located in Schaumburg, Ill.; White Hen Pantry's offices are in Lombard, Ill.

With the addition of the White Hen stores, 7-Eleven will have more than 7,100 company-operated, franchised and licensed stores in North America. Joseph DePinto, 7-Eleven president and CEO, called the chain's largest acquisition in 20 years "a strategic fit for 7-Eleven."

DePinto continued: "White Hen has a well-earned reputation for quality, service and fresh foods. We plan to incorporate best practices from the White Hen stores and provide our customers with an even better and more convenient shopping experience."

The CEO also noted that the White Hen stores enhance 7-Eleven's market presence in the greater Chicago area. The two retailers have a long history in the Chicago area. White Hen opened its first store here in 1965; 7-Eleven followed a year later with its first Chicagoland store. Together, they now total nearly 400 stores in the Chicago market.

"The c-store business has become increasingly sophisticated and competitive," said White Hen Pantry, Inc. president and CEO Brandon Barnholt. "As the founder and global leader of convenience retailing, 7-Eleven -- probably more than anyone -- understands what it takes to be successful in this business. I believe this decision will provide great opportunities for the future of our company, our franchisees and our customers."

In an exclusive interview with CSNews in April, Barnholt described White Hen as a brand "that has been in turnaround mode for the past three years." But, he noted that the company's focus on its "Hot & Fresh" sandwich program was helping it carve out a niche as a "small box fresh" retailer -- enabling White Hen to capture food dollars from consumers who seek convenience, as well as a high-quality food experience. At the time, he said, "I have never had a brand with more head room to grow than White Hen." (See CSNews, cover story, July 17).

For 7-Eleven, "Chicago is a growth market," said Nancy Smith, vice president for 7-Eleven stores in the Midwest. "With the addition of White Hen, convenience becomes even more accessible to Chicago area shoppers."

7-Eleven, Inc., based in Dallas, is the largest chain in the convenience retailing industry. Globally, 7-Eleven operates, franchises or licenses more than 30,000 stores in 18 countries and U.S. territories. During 2005, 7-Eleven stores worldwide generated total sales of approximately $43 billion.