BONUS CONTENT: Ups and Downs for the Roo
CARY, N.C. -- Last month, The Pantry Inc. opened a new Kangaroo Express store in Charlotte, N.C. The 4,900-square-foot store brought the chain’s store count to 1,572 locations in 13 states, and it marked the first newly built Kangaroo Express store opened in four years.
A lot has happened at the North Carolina-based convenience store chain in the past four years.
The Pantry was riding high in April 2009 when it announced it would buy 40 convenience stores in Mobile, Ala., from Herndon Oil Corp. The acquisition brought the company’s store count to more than 1,670 stores and was just one of several deals engineered by former Chairman and CEO Peter J. Sodini, who retired later that year after 10 years as chief executive.
The decade under Sodini was marked by a series of acquisitions that built The Pantry into one of the largest c-store chains in the nation, albeit one plagued by markedly different store formats, store names, fuel suppliers and information systems.
Since Sodini's retirement in 2009, the company's leadership team has seen significant turnover.
Former Coca-Cola Enterprises executive Terrance “Terry” M. Marks was brought in to succeed Sodini and took the helm in September of that year. Not even two years later, though, Marks shocked the board by telling them that he planned to resign from his post. He returned to his hometown of Atlanta to become CEO of the Hooters restaurant chain.
After a long and extensive search, The Pantry finally announced last February it had tapped grocery industry veteran Dennis Hatchell to be its new president and CEO. He assumed the role that March.
In the new issue of Convenience Store News, Hatchell granted an exclusive cover story interview to talk about his first year as The Pantry's CEO and lay out his vision for the chain's future. Here, we look back upon what has been an eventful four years for The Pantry.
September – Director Edwin J. Holman succeeds retiring Peter Sodini as chairman of the board.
December – On the same day it reported weak fourth-quarter results, The Pantry’s new president and CEO Terry Marks reveals the chain will invest in new information systems and comprehensive, on-the-go solutions in the coming year.
February – The company posts a larger than expected first-quarter loss of $26.1 million, saying it was hurt by below-average fuel and grocery margins.
March – Marks announces that new “on-the-go food” options will be introduced chainwide. The program goes live in Charlotte, N.C.
May – The Pantry posts a second-quarter loss of $166.1 million and reports plans to sell 80 sites that don’t fit its strategic plans.
June – A new “Fresh Initiative” coffee program – including an upgraded Bean Street coffee offering with urns, a new prep station, and upgraded cups and accessories -- kicks off.
August – Second-quarter results improve as the retailer beats analysts’ expectations. Net income moves into the black at $18 million vs. a net loss the previous year. Merchandise sales and gross margins improve as well.
September – Marks talks to CSNews about the “cultural revolution” underway at The Pantry, citing a new business strategy and management philosophy, huge investments in information technology, and a reimaged store menu and sales environment under a unified Kangaroo Express banner.
December – The retailer expands into two new states through the acquisition of 47 stores in Kansas and Missouri from Presto Convenience Stores LLC.
January – The company reports a net loss for fiscal 2010 of $165.6 million vs. net income of $54.1 million in fiscal 2009.
February – The Pantry narrows its first-quarter loss, reporting a 1.3-percent increase in comp-store merchandise sales and improved merchandise gross margins.
May – The Fresh Initiative program is expected to be rolled out to 400 stores by the end of 2011.
June – The company retains NRC Realty & Capital Advisors to assist in the sale of 114 more locations in nine states that don’t fit its strategic plans.
August – Third-quarter earnings rose $1 million from the previous year to $19 million. Marks cites the continued rollout of the Fresh Initiative and foodservice growth in renovated stores.
August – Marks shocks the board by telling them he plans to resign from his post. He goes back to his hometown of Atlanta and becomes CEO of the Hooters restaurant chain.
September – The Pantry's "Salute Our Troops" campaign raises more than $2 million for military charities. The company wins CSNews' Spirit Award for Community Outreach in its chain-size category.
October – Chairman Holman takes the reins as interim CEO following Mark's departure.
December – Kangaroo Express stores begin rolling out new fresh-baked goods as part of an expansion of the Fresh Initiative. The search for a new CEO continues as fourth-quarter net income falls.
January – Kangaroo Express says it will test the Noble Roman pizza program at a Raleigh, N.C., store.
February – After a lengthy search, The Pantry taps grocery industry veteran Dennis Hatchell as its next president and CEO. The chain also announces it is selling 37 sites in nine Southeast states.
April – Chief Financial Officer Mark Bierley becomes the fourth executive to exit the company in less than a year, following operations exec Brad Williams, CEO Marks and marketing exec Dave Henninger.
May – Two years after the rollout of the Fresh Initiative, Hatchell says he’s leaning to a more “holistic” approach for reviving Kangaroo Express, as the company reports a second-quarter net loss of $9.7 million.
July – The Pantry begins to pursue refinancing of approximately $598 million in outstanding debt and issues $250 million in notes that have to be paid back in 2020. This debt refinancing is concluded in August.
August – Hatchell announces plans to remodel 10 percent of the retailer's stores each year.
September – Year two of the Salute Our Troops charitable campaign tops $3 million in donations. Also, the company adds Joe Venezia to its executive leadership team as senior vice president of operations.
October – Kangaroo Express wins CSNews' 2012 Grand Spirit Award for Community Outreach.
December – Despite progress on many initiatives, The Pantry reports a fourth-quarter net loss of $4.8 million. For the fiscal year, its net loss was $2.5 million vs. net income of $9.8 million the previous year.
January – The outlook for the coming year assumes the closure of 35 to 40 more stores. The Pantry ended last year with 1,578 company-operated stores, 218 quick-service restaurants and 71 wholesale fuel sites. Hatchell says one focal point for 2013 will be bringing fuel gallon sales more in line with industry standards by rolling out a new fuel pricing system.
January – B. Clyde Preslar is hired as senior vice president and chief financial officer.
February – Senior vice president of Retail Merchandising and Restaurants John Fisher leaves the company.
March -- The Pantry opens it first newly built Kangaroo Express store in four years.