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Couche-Tard Reports "Good Progress" in Irving Oil Partnership

LAVAL, Quebec -- A year and a half into its expanded seven-year partnership with Irving Oil, Alimentation Couche-Tard President and CEO Alain Bouchard said there has been "very good progression" in the collaboration, which was announced in May 2008.

As CSNews Online previously reported, the companies agreed then to expand their partnership to include 252 Irving Oil c-stores across Atlantic Canada and New England. The original partnership between the two retailers, formed in 2001, was for 62 stores.

Under the expanded deal, Couche-Tard entered into a 20-year market-value lease plus options for the stores and equipment, and operates the stores under a Couche-Tard or Circle K banner with upgraded point-of-sale and signage. Meanwhile, Irving Oil continues to supply fuel to the stores, and its brand remains on the locations' forecourts.

When announcing the deal in May 2008, Couche-Tard executives said a year from then, the company expected to see the same profit before taxes from the Irving Oil stores as it earns on a same-store basis. At that time, Couche-Tard stores earned $85,000 per store annually on a chainwide average, the executives said.

During a recent Webcast with investors and financial analysts, Bouchard reported a reduction in operational expenses and costs at the Irving Oil stores. "There's bottom-line improvement, but not yet in line with our average stores in our Quebec division, which manages those [Irving Oil] stores," the CEO explained.

Couche-Tard took over the stores in July 2008. The expanded deal included 124 U.S. sites in Maine, New Hampshire, Massachusetts and Vermont; and 128 Canada sites in New Brunswick, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island.

To date, all the U.S. locations have been rebranded. In Canada, 103 out of the 127 stores in Atlantic Canada have been rebranded, with the exception of Newfoundland, where rebranding is planned in 2010, the retailer told CSNews Online.

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