Three convenience store managers who have served Appco for a combined total of more than 30 years say the stores have received more product and are getting all grades of gas since Andy Weber was named chief restructuring officer in bankruptcy court April 14. Weber works for NRC Realty Advisors, a Chicago company that will serve as sales agent in marketing Appco and its assets.
“It does make me hopeful that at least somebody will buy us and we can go back to a normal life,” says “Meg” (none of the employees wanted their real names used).
“I feel like by getting the product in here, somebody will buy us, because we were very profitable and we can be again,” Meg says.
She says “normal” began to change within months after Texas-based Titan Global Holdings bought Appco from long-time owner Jim MacLean in September 2007. Bankruptcy judge Marsha Parsons, in appointing Weber, ordered Titan not to interfere with his efforts to position the company for a sale, but Meg says while Titan’s principals were at the reins, things changed significantly from the MacLean years.
“Really the worst started about the middle of November,” Meg says. “They just wanted us to cut back on our ordering, and we were getting less and less stuff so before Christmas we had dwindled down to nothing.”
Appco, which filed for Chapter 11 bankruptcy protection Feb. 9, transferred more than $3.5 million in “intercompany cash transfers” to Titan between Feb. 18, 2008, and Feb. 1, 2009, according to bankruptcy court documents. More than $600,000 of that went out the door after Nov. 14, when Meg and others say the stores weren’t getting product and when many unsecured creditors — who are owed a total of more than $7 million — weren’t getting paid.
“When MacLean had the stores, we’d see our P and L’s (profit and loss) every month,” Meg says. “You’re aware of what your store’s making that way instead of being in the dark. We still knew we were making money, but what was happening to that money I don’t know.”
Another manager, Judy, says some of Appco’s non-store employees have been laid off since Weber arrived. She says she understands the company needs to make itself lean for a prospective buyer, and that any buyer probably would already have central office staff, maintenance workers and the like, but that doesn’t make it any easier to accept.
“It really breaks my heart to see all these people I’ve worked with for years being told they’re not needed,” Judy says. “It’s awful.”
In a release from NRC, Weber figured NRC would put Appco on the market within “a very few weeks.” NRC has extensive experience in sales of convenience stores and gas stations, and Weber said the company’s first impression was that Appco could be marketed as an entire company and not in pieces and parts.
“All options will certainly be evaluated,” Weber said. “NRC will be reaching out to companies we know who are qualified purchasers likely to have an interest in buying all or parts of this company, but we will also be welcoming inquiries from other prospective bidders.”
Judy places the blame for Appco’s woes squarely at the feet of Titan.
“This was the smoothest, most loyal employee company I have ever seen,” she says. “In fact, the other oil companies used to really envy us because we always kept our employees. You couldn’t ask for better people to work for than Jim MacLean and (former CEO) Jeff Benedict.”
Both Judy and Meg say they would prefer to stay right where they are if Weber can broker a sale.
“I’ve done this for so many years, and I like my customers, I like the location, I like my employees, and I’m gonna stay to see it through,” Judy says. “I’m gonna stay until the fat lady sings.”
Meg, who says “I love my job,” says Appco officials haven’t told managers that Appco filed a motion in bankruptcy court to allow it to pursue getting lottery back in its stores.
“They’re still not telling us anything, but that would help tremendously,” she says. “You don’t make but like 6 cents off a ticket, but there was times we would sell at least 1,500, 2,000 a day.
“We could push some lottery tickets out of here, and they’re going to buy other stuff when they come in.”
While lottery may be on the way back in and volumes are picking up, both Judy and another manager, “Rachel,” say lots of holes remain in Appco’s offerings.
An e-mail memo late last week from a central office manager, Scott Wolfe, set a limit on how much each store could order in groceries from L.P. Shanks, the main grocery vendor. “Limit the order to cig (cigarettes) and moist snuff product unless emergency,” the e-mail reads in part.
“Volume is picking up, but the workers are still concerned about not getting enough hours,” Rachel says.
She says McKee Foods still hasn’t returned its Little Debbie products to stores, and without money orders and lottery, sales capacity is still limited. Additionally, when the stores were out of gas and diesel from early January to mid-March, corporate diesel customers who used Appco “Fleet Cards” had to go elsewhere.
“We’ve lost a lot of diesel sales because of that. That was most of our diesel sales. When we ran out of diesel, a lot of the companies just went elsewhere and nobody has even tried to come back.”