Gilligan Oil Launches Expansion Push

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Gilligan Oil Launches Expansion Push

HYDE PARK, Ohio -- Gilligan Oil Co., a privately held firm headquartered here, will make a sizeable footprint on the Southwest Ohio convenience and fuels market after acquiring 33 Shell stations and supply contracts for 10 other stations, making it one of the larger gasoline marketers in the area.

The stations are located in Hamilton, Butler, Warren and Clermont counties. This marks the company's entry into the area; previously it had only operated stores in the Columbus, Ohio area. The acquisition almost triples the company's fuel supply capacity, from supplying 35 million gallons annually to more than 100 million gallons, Gilligan president Patrick Gilligan told The Enquirer.

With the acquisition, Gilligan Oil grows from 12 convenience stores, mainly under the Exxon and Sunoco banners, to 45 stores. Gilligan also previously supplied 25 stores with fuel, and increased that number to 35 with the acquisition. Gilligan expects that the new stores and contracts will raise his annual revenue from $80 million to nearly $300 million. Payroll has also increased to 500 full- and part-time employees due to the acquisition.

"We're excited about the opportunity here," Gilligan told the paper. Gilligan, an Ohio native who grew up in Anderson Township, started in the fuel business as a manager for BP Oil. He worked in the oil jobber market in 1993 with two leased properties in Columbus.

Shell announced its plans to sell retail operations in 16 markets last year. Gilligan told the paper that his local presence helped him land the acquisition in one of the 16 markets. "All the other bidders were from outside Cincinnati," he noted. "It was basically an investment strategy by Shell. They didn't want to leave the Ohio market, but they wanted to take some of their investment here and put it in other areas."

"Shell's a top-selling brand here, so we're going to re-invest and rebuild the franchise," Gilligan told The Enquirer. To be successful, Gilligan Oil has a three-pronged strategy to grow the company. The first stage in the strategy uses $10 million over the next few years to expand a dozen or so stores. Popeye's and Subway restaurants, of which Gilligan is a franchisee, will be added as part of this step to those stations that do not already have a foodservice offering. In addition, carwashes, fueling stations and convenience stores will be added to locations that do not have them.

Gilligan's second step is to expand it network of branded supply agreements. The last step is to add additional outlets to its portfolio.

The local gasoline market is very competitive: where supermarkets such as Kroger and Wal-Mart have entered the gasoline business, 25 percent of the market has been taken from traditional gas retailers, according to Gilligan. He told the paper that to stay on top, convenience stores are looking for more profit centers. Gilligan's strategy includes borrowing elements from big chains' plans, such as supermarkets that offer gasoline discounts for grocery purchases. He plans on offering $2 carwashes and discounts on gasoline for carwash customers.