Sun Capital's Strength in Numbers

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Sun Capital's Strength in Numbers

By Linda Lisanti

When Sun Capital Partners acquired Worsley Operating Cos. in March 2008, Worsley CEO Jeff Turpin quickly realized being able to tap into the resources and expertise shared between the investment firm's 100-plus portfolio companies was a huge advantage.

"With Sun Capital, there's an expert on almost every topic," Turpin said.

"And if we don't have one, we will get one," added Michael Archambault, vice president of operations for Sun Capital's convenience store investments, which include Worsley, operator of 211 c-stores across North and South Carolina, and Village Pantry, a chain of 190 convenience stores operating throughout Indiana and Ohio.

While Worsley and Village Pantry operate as separate entities under the Sun Capital umbrella -- each led by its own management team -- there is a continuous sharing of best practices between them whether it's related to accounting, marketing or operations.

"The real value is in knowledge," Village Pantry CEO Mick Parker told Convenience Store News. "I have access to supplier costs and deal information I wouldn't have otherwise. We share program development. We work together as it makes sense."

Some of the specific ways the retailers have benefited include:

-- Worsley's system for rebates was immediately implemented at Village Pantry.
-- The companies have started sharing some treasury and finance support.
-- Having multiple data points enables them to get the best pricing from mutual vendors.
-- The chains are now working with an outside company to jointly develop training materials, such as a store manager leadership model, which both brands can use.

In addition to these efficiencies within the c-store group, Boca-Raton, Fla.-based Sun Capital encourages resource-sharing between all of its portfolio companies. Sun Capital manages such restaurant chains as Boston Market, Friendly Ice Cream Corp., Timothy's World Coffee and Bruegger's Enterprises. Grocer Marsh Supermarkets, drug store chain Drug Fair, and mass merchant ShopKo Stores are part of the firm's portfolio as well.

Global purchasing -- not only for merchandise, but also for health care -- is an area where Archambault said they're trying to leverage Sun Capital's numbers. "We're looking at our different contracts," he said. "We've found in the past year-and-a-half to two years that we're now at a size where we can get people's attention with the volume we do."

For instance, Sun Capital recently expanded its partnership with The Coca-Cola Co. Under the agreement, Coca-Cola fountain dispensers will be in about half of Village Pantry's locations by the end of this year, and Coca-Cola will continue to be the preferred beverage provider for Boston Market, Bruegger's Bagels, Fazoli's, Friendly's, Smokey Bones Barbeque and Grill, and Garden Fresh Restaurant. Coca-Cola will also expand to 100 percent of Sun Capital's Restaurants Unlimited outlets in January 2010.

Another opportunity for sharing procurement came about this holiday season when Village Pantry partnered with Pamida, a rural discounter and fellow Sun Capital portfolio company, and sold a line of non-traditional convenience products such as small electronics, luggage and leather goods in its c-stores. "We got with [the Pamida] folks and piggy-backed on their buying. They directed us to their best-sellers," Parker explained. Halfway through the season, the items were doing better than expected.

Conversely, Village Pantry was able to help other Sun Capital portfolio companies get better purchasing deals by sharing its information, according to Parker. "In one case, Village Pantry had a much better buying arrangement with one vendor than another one of Sun Capital's companies. We shared our info with that company, so that they could go to the same supplier and leverage that information to get a better deal," he said.