Fuelforce is being forced to downsize and restructure following a move by one of its investors to sell up and realise it interests in the company.
Fifty seven sites have been sold to Murco Petroleum and its US-based parent company, Murphy Oil Corporation. Another 22 are in line to go to Somerfield and 25 to Malthurst, one of the companies behind Pace Petroleum, which acquired Kuwait Petroleum last year. That would leave around 60 for a restructured Fuelforce network.
However, far from Fuelforce being in trouble, the company’s founder Rikki Hunt, who single-handedly put together the financial package to buy Conoco’s 193 Jet-branded company-owned sites in 2001, is keen to stress how well the organisation has performed.
“Profit is not the issue. According to a recent Mintel report, Fuelforce is the 120th most profitable retailer in Europe,” he said. “The redundancies we made at Christmas – about 14 staff out of 60 went – were to do with our move to direct-managed operations. We simply didn’t need as many people. Unfortunately people are linking the re-shaping we did in December with the current sell-offs and come to the wrong conclusions.
“In fact, our network is now all direct-managed and it’s working very well. In the first area to be converted – Scotland – which has just completed one year’s trading, sales were 12% up in the shop, 4% up on valeting and 2% up on fuel – and that’s in a poor market. Direct management works only on the basis that you must control it – and we’ve got great control. But the reality is that the market at the moment means that investors want to realise their positions – the market is good from a propety point of view – and while disappointed in that it’s not what I want to do, I have to recommend it because it’s good for the company and it is the reality of our industry and investors. It’s a re-shape and a change. But I intend to stick with it. I’m enjoying this business, I know our model works and we’re a very experienced team here.”
Meanwhile Jeremy Clarke, retail marketing manager of Murco, said the acquisition was a major boost to the company’s network, which will now have 153 company-owned sites. “All the new sites are located in our core operating areas and they will enable us to develop our presence in the forecourt sector and in particular to expand our highly successful alliance with the Costcutter Supermarket Group. At the same time, this acquisition brings synergistic advantages to our network which will result in significant operating benefits across our whole business. For the immediate future the new stations will continue to be Jet branded. The long-term branding of these sites will be part of an ongoing strategy review.”