Dive Brief:
- Parkland Corporation is selling its Florida business, which includes 100 convenience retail locations and other assets, the company announced on Tuesday.
- Parkland expects to find a buyer and complete the sale within 12 to 18 months for these 100 locations, which represent nearly half of its company-operated footprint in the U.S.
- Parkland’s U.S. business has struggled since early last year — especially in Florida — as it faces declines in retail and commercial fuel volumes and undergoes hundreds of staff cuts.
Dive Insight:
In its Q2 earnings call last month, Parkland President and CEO Robert Espey said the company’s business in Florida hadn’t reached its full potential. Besides challenges with its retail and commercial fuels, Parkland’s struggles in Florida stem from margin issues in its supply contracts, Espey said.
Parkland had begun implementing “tactical improvements” to its Florida business, which included reducing labor and overtime by over 300,000 hours per year, and refreshing the interiors and merchandising options at over 40 On the Run c-stores.
Those improvements appear to have been insufficient, as Parkland has decided to sell its 100 retail sites — as well as nine cardlock sites and four bulk storage plants and warehouses — in the Sunshine State.
Espey emphasized Parkland’s intention to continue growing in the northern U.S., where it operates in Idaho, Utah, Montana and the Dakotas.
“This disposition reflects our commitment to direct capital towards our highest return opportunities and maximize shareholder value,” Espey said in Tuesday’s announcement. “We remain deeply committed to our northern US business, which is performing well and has strong connectivity with Canada.”
Placing its Florida business up for sale is the latest step in Parkland’s broader plan to divest $500 million worth of non-core assets, including select retail sites, as well as some logistics and Canadian commercial assets. That plan is now expected to “significantly exceed” that $500 million amount by the end of 2025, according to Tuesday’s announcement.
Selling its Florida business is part of an ongoing strategy to double Parkland's cash flow per share and grow adjusted EBITDA to $2.5 billion by 2028, it said on Tuesday. Multiple investors have called for executive changes and even a sale of the company as Parkland has faced long-term underperformance.
Calgary, Alberta-based Parkland is the largest independent fuel retailer and second-largest c-store operator in Canada. It has 210 company-operated retail sites in the U.S., in addition to 450 dealer locations.
