Dive Brief:

• SQRL Holdings has agreed to sell its convenience store arm, SQRL Service Stations, to Gas Hub Investments LLC, a newly created business based in Baton Rouge, Louisiana, for an undisclosed amount, SQRL’s Chief Financial Officer James Irvine confirmed on Wednesday.
• Irvine could not share information on the deal beyond that the two companies are “ironing out the details.” According to a company memo obtained by C-Store Dive, the agreement aims to resolve “significant liquidity issues” SQRL has faced over the past several months. Once the agreement closes, Gas Hub will become the new owner of SQRL Service Stations, the memo says.
• Although the memo did not specify a closing date for the deal, it notes that “there will be administrative changes in the coming weeks” as SQRL transitions ownership.

Dive Insight:

Irvine declined to comment when asked how the deal, once closed, will impact SQRL’s leadership and its staff moving forward, as well as what banner SQRL’s stores will appear under.

Multiple sources, including a current corporate SQRL employee and a landlord who SQRL pays rent to, said that SQRL has provided little communication regarding what this deal means for the future of the company, its stores and staff.

If SQRL’s locations end up being rebranded or permanently closed as part of the deal, it will mark an abrupt end to the company’s short reign as a major c-store operator. Just six months ago, SQRL acquired over 200 locations in a move that nearly tripled its store count.

According to its website, SQRL currently operates around 320 convenience stores across 20 U.S. states.

SQRL’s memo did not specify what “liquidity issues” it was referring to that sparked its leadership to make the deal with Gas Hub. However, over the past few years, the convenience retailer has been accused of owing millions of dollars to several vendors. Last week, the U.S. Department of Labor confirmed that its Wage and Hour division is investigating SQRL for the third time since 2021.

According to the Louisiana Secretary of State’s website, Gas Hub was established in February. Its president is Jamal Hizam of Baton Rouge. A Louisiana-based real estate brokerage firm, Elifin, noted earlier this month that Hizam owns at least two other convenience stores in the Baton Rouge area.

Irvine confirmed that Hizam is the owner of Gas Hub, but declined to share more information on the company. Additional details about Gas Hub were not immediately available.

SQRL burst onto the c-store landscape last October when it acquired 210 locations — which were formerly leased to bankrupt retailer Mountain Express Oil — from real estate investment trust Blue Owl Capital. Founder Blake Smith later noted SQRL’s aspirations to reach 500 locations in its network by the end of 2024.

Over the past several months, SQRL began laying off hundreds of full- and part-time employees as it took on a new operating model to give store managers a “vested interest” in the locations they ran. Smith said in an interview at the time that managers would also control their stores’ staff and payroll “like a franchisee,” which was the foremost reason for the layoffs.