Top 50 indies retailer Kenny Webster recently confirmed his company’s status as the biggest independent retailer in Scotland following a £3.5m deal to acquire eight former Fuelforce sites it had previously been operating.
The deal, backed by Allied Irish Bank (GB), was confirmed in July, when Victoria Sands, the company which bought all the former Fuelforce sites (and then sold them off), agreed to sell eight of the 10 Jet-branded sites Calanike had been running. It takes Calanike’s total number of freehold sites to 19, and gives the company a toe-hold in the UK with three sites based in the north of England (two in Newcastle and one based in Middlesbrough) with the remainder in Glasgow, Edinburgh and the surrounding areas. It means the company now employs 220 people, with turnover in the coming year expected to exceed £60m.
From the company’s head office in Kirkintilloch, Glasgow, Kenny says: "I’m delighted we successfully concluded a deal to acquire these additional sites. We’re firmly positioned as the number one independent in Scotland and we’re now a significant player in the UK. As a result of this expansion we’re targeting an increase in sales of up to 20%."
Sitting at the head of a £60m firm is a long way from Kenny’s start in business as a milkman.
He moved into the petrol business in 1984, leasing sites from BP and working hard to develop them. Trouble was, it seemed that every time he achieved a great success with a site, BP took it back into company operation.
"After a while this was somewhat jarring," says Kenny. "I had a very good site in Lanarkshire, and I made a pledge to myself that the next time it happened I would buy a site."
That moment came in 1998. Having built up funds over the years through his success on the leased sites, Kenny bought his first forecourt, a Jet site in Cambuslang, and set up Calanike (the name is a combination of his family’s names - wife (Ca)rolanne, daughters (La)ura and (Ni)cola; and (Ke)nny.
"I had been successful because I had been so customer-focused.
"I was around the sites a lot, so I could probably walk in and out and knew most of the customers by name. If customers are happy with the service they’ve got, they will come back. It’s important to make people feel welcome but not too over-powered - it’s about building a rapport."
Kenny wasted no time in redeveloping the site, spending £330,000 on a full knock-down-rebuild within the first six months of ownership: "After the redevelopment fuel sales went to about 3.4 million litres a year - from 1mlpa - and the 100sq m shop took about £25,000 - up from about £1,000 a week previously. I also changed the fuel to BP. It was a lot of investment, and the Bank of Scotland supported me because they’d seen the growth I’d had."
Then in 2000 Kenny bought another petrol station in East Kilbride; and the following year leased another two from BP, which meant the company was running four sites altogether.
In August 2003 a significant development came when Calanike acquired 10 sites from BP. But before the decision was made there was a lot to think about: "There were 10 sites on offer from BP, so initially I cherry-picked three or four," explains Kenny. "Then I thought about what structure I could put in place to manage them. That led me to doing a projection covering all the sites. When I did that I realised that we could take them all on, but I would have to invest heavily in IT to keep tabs on it all.
"There was a bidding process, and there was quite a bit of competition for individual sites. Obviously I did have a history with BP, and I was successful in the acquisition, but it probably suited BP more than anything that they could do one deal with one person.
"I knew most of the sites and knew there hadn’t been much money spent on them for a number of years, especially in the shops, which to me meant they had great potential for growth. I was very comfortable with the idea of taking them on, although it meant in a short space of time I had gone from running one site on a personal basis to running a chain."
It was at this point Kenny linked up with the Allied Irish bank, which worked hard to win his business: "Allied Irish was very personal - like me being focused with my own customers," explains Kenny. "The senior lending man from London flew up and went to every site so he could understand what I was trying to do. I’ve been with Allied Irish ever since. The staff are very good - very professional - and make me feel comfortable with what I’m doing."
And, true to his plan, as the deal went through, Kenny installed new computer systems to control all the retail operations from head office - "so that the managers can concentrate on managing rather than worrying about finances," he explains.
Over the next two years around £300,000 was spent on shop developments across the sites.
"It’s an ongoing process," says Kenny. "My aim always has been to position our sites as convenience retailers with petrol sales being just part of the service we provide to our customers. The retail side is key to maximising the value of our sites and growing the business, and it’s that approach that has enabled us to achieve the success we have enjoyed to date."
The addition of the latest sites, which were initially managed/leased by Calanike, took the company to another level and investment in a new head office 18 months ago.
"The sites are out of tie and probably won’t stay Jet," says Kenny. "I’ve currently got a number of offers on the table."
With his eye on controlling costs across all levels, Kenny has discontinued a trial with Spar on one site, and is pursuing plans to develop his own shop brand using the expertise of existing suppliers "which is free," he says.