New Sign Signals Change and Growth at Kum & Go
WEST DES MOINES, Iowa -- Kum & Go, the 40-year-old convenience store chain based here, has grown from roughly a $400 million company to about $2 billion in the past seven years, CEO Kyle Krause said in an interview last month with the Des Moines Register, as workers took his family name off the West Des Moines office building.
In the interview, Krause described the company as one that has tried to grow both rapidly and well in the past decade. "We've changed what we look like as a company," he said, alluding to that as part of the reason for changing the sign outside Krause's West Des Moines office from Krause Gentle Corp. to Kum & Go.
Krause replaced his father, W.A. "Bill" Krause, as chief executive in 2003. The elder Krause was inducted into the CSNews Hall of Fame in 2006. He co-founded the convenience store chain with his father-in-law, Tony Gentle, in 1969 -- thus the company name: Krause Gentle Corp.
Kum & Go now operates 464 stores, up from 314 at the beginning of 2004, Krause told the Register. He said the company continues to expand, modernize, and add smarter tools for product selection and inventory control (See CSNews, "Kum & Go Uses Demand-Driven Replenishment Solutions for Inventory").
On the sign change, Krause told the Register, "I always knew what Krause Gentle meant, but I'm not sure the public did. I just felt that this communicated a clearer message."
Krause also commented on the recent news that Alimentation Couche-Tard, the Canadian parent of Circle K, wants to acquire Ankeny, Iowa-based Casey's General Stores. Last month Casey's board rejected Couche-Tard's unsolicited offer of $36 per share for the company and threatened to take their case to shareholders if the Casey's board refused to open negotiations. Casey's responded a week letter by approving a "poison pill" provision that would flood the market with cheap new stock if any would-be purchaser acquires more than 15 percent of the company.
Stressing that he held no inside information, Krause noted the decline in convenience store valuations from their highs between 2006 and 2008, probably accounts for much of Couche-Tard's interest. Kum & Go was very selective during that period as well, Krause noted.
Krause said growth will continue at Kum & Go. The retailer plans to build 20 to 25 new stores each year and acquire others if the price is right. Krause extolled the benefits of getting bigger.
For example, the company's size supports a six-person business intelligence department that can focus squarely on product mix and site-selection decisions, he told the newspaper. Select employees also monitor quality on a regular basis.
"You get to a size where you can do that and the end output is that you can create a better quality experience for the customers of Kum & Go," he told the Register. "My growth plans are to grow as quickly as we can and remain privately owned."
Private ownership allows the company to think longer term, said Krause, citing the company's early support of ethanol and E85 as initiatives that likely would not have happened if it was a public company worried by its stock price.
Future initiatives to look for from Kum & Go include a larger store size, expanded selection of private label food items, and more Redbox DVD kiosks.
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