7-Eleven parent to shutter over 400 North American stores, change name
The Japanese company that operates 7-Eleven convenience stores is closing underperforming stores, among other strategic initiatives.
In the wake of rejecting a non-binding takeover bid from Couche-Tard, which operates more than 16,000 Couche-Tard and Circle K stores across North America and Europe, to acquire all outstanding shares of Seven & i for $14.86 per share, or $38.5 billion for “grossly undervaluing” the company, Seven and i Holdings said it will close 444 North American stores.
[READ MORE: 7-Eleven parent company rejects $39 billion buyout bid]
7-Eleven, the world's biggest convenience store chain with 85,000 stores across 20 countries and territories, said in a financial filing the move will create an operating income benefit of approximately $30 million in 2024. The company cited consumers pulling back on purchases due to inflation and continuing declines in cigarette sales as negatively impacting sales.
In addition, the company will change its corporate structure so a new holding company called 7-Eleven Corp. will manage the convenience business and a sister corporation called York Holdings Co. will operate its other businesses, such as fast food chains Laredo Taco Company, and Raise the Roof Chicken and Biscuits.
Other strategic moves the company announced in its financial filing include:
- Obtain a one-time gain of $520 million by selling and leasing back an unspecified number of stores in 2024.
- Roll out the 7Now mobile app, including delivery in as little as 20 minutes, nationwide by February 2025.
- Modernize in-store food and beverage assortment with in-store baking, self-serve roller grill, grab and go cases and specialty beverages.
Couche-Tard still pursuing takeover
The Couche-Tard bid for Seven & i is the largest all-cash offer for a company since Elon Musk bought Twitter for $40.2 billion in 2022, according to LSEG data, reported Reuters. It would create the world's largest convenience store chain and a new retail powerhouse.
And the effort to purchase 7-Eleven has not ended. On Oct. 9, 7-Eleven disclosed it had received a “confidential, private and non-binding proposal” from Couche-Tard and is engaged in confidential discussions with the convenience giant. 7-Eleven said it will act in the best interest of the company and its shareholders.
According to Bloomberg, the revised Couche-Tard offer may be as high as $47 billion.
