Editor’s note: This story first appeared in the Dec. 7 print edition of The Times-Sentinel. To get stories like this first, subscribe for home delivery. Call 316-540-0500.
By Travis Mounts
A rapidly-expanding convenience store chain based in Iowa has purchased the KAPS chain, including the KAPS location in Cheney.
Yesway announced the purchase of KAPS, LLC, on Nov. 30. The KAPS chain was locally-owned by Kevin O’Brien. The five-store chain also included two McPherson locations plus stores in Lyons and Lindsborg. In addition, the Yesway announced the purchase of the New Deal Travel Center in New Deal, Texas.
Yesway is based in West Des Moines, Iowa, and operates under the umbrella of BW Gas and Convenience, which is affiliated with private equity firm Brookwood Financial Partners of Beverly, Mass.
The new chain has been on a buying spree throughout the Midwest since it was founded in 2015. In March, Yesway bought five of six family-owned Pic Quik locations in Hutchinson. The addition of the KAPS stores gives Yesway 10 Kansas locations. The company has 32 locations in Iowa and 32 in Texas, plus two in Guymon, Okla., according to its website.
The company purchased 35 stores in Texas in May, and a Rockford, Iowa store in September.
“We’ve got a pretty interesting trajectory…over the last 12-18 months,” said Tom Brown, president and director of real estate acquisitions for Yesway. He leads a team of six, and is looking to add two more people to help locate more stores to acquire. “We’re getting more credibility in the market place.”
Brown said Yesway identified KAPS as a possible acquisition target, and initiated talks with O’Brien.
Brown could not speak to a specific schedule for changes at the Cheney store, but said once a store is bought, there typically is a 60-90 day window where the company comes in and converts store operations to the Yesway platform. That includes training, store operations and sales efforts.
“During that period of time, we’re also finalizing our renovation plans for each of those stores,” Brown said.
The company adds value through interior and exterior additions. That includes signage, parking, lighting and fuel pump changes outside, and interior changes like new countertop, restroom upgrades and more. He said the company usually has a plan and a dollar amount for the renovation before a purchase is completed.
Food service and the Yesway loyalty program are points of emphasis.
“That’s where folks will see the biggest impact,” Brown said.
The company began with the purchase of 10 Iowa Country Stores, and then grew more by taking over 21 Kum & Go stores in Iowa in 2016. The company is focusing on small and medium markets in the Midwest.
According to the trade store publication Convenience Store Decisions, Yesway set up its regional headquarters in West Des Moines just before the Kum & Go purchase. According to the article, Brookwood Financial Partners began looking at the convenience story industry six years ago. It is an effort to establish a business segment that does not have the same ups and downs as real estate, the equity firm’s primary business. The company identified the Midwest as having plenty of target markets that met their search criteria.
Brown said the company targeted the Midwest because it saw more room for growth than saturated markets on the coasts, in the Southeast or in the Southwest.
He said the industry is changing rapidly, especially in regards to food service and technology. Chains like Quik Trip, Kwik Shop and Casey’s create new levels of competition.
“It’s hard for small operators to compete. We’re going to be able to go toe-to-toe” with them, Brown said, because of Yesway’s size and available capital.
Yesway is a privately-owned chain, and there are no franchises. The Cheney store’s hours are listed as 6 a.m. to 11 p.m. daily. Many locations are open 24 hours. Convenience Store Decision named Yesway as a “2017 Chain to Watch.”
O’Brien built the Cheney KAPS location in 2006, which at the time was his sixth KAPS location. “I’ve decided to stay in rural markets,” he said then. “I like putting my best foot forward for the people in these communities. That’s why I am active in the Chambers, to show support for improving our local communities.”
In 2012, KAPS expanded its hot food offerings with the addition of Chester’s Chicken and Hunt Brother Pizza. KAPS already was offering hamburgers, brisket and pulled pork sandwiches, and hot breakfast items. Fountain and coffee offerings were expanded, too.
In 2016, KAPS took over the marina at Cheney State Park.
In May 2003, O’Brien bought six central Kansas convenience stories from Coastal after that chain’s sale to Phillips 66. O’Brien had worked in the industry for a number of years, first with Stop and Shop, and then with Coastal, the Times-Sentinel reported in April 2006. O’Brien and his family moved to Cheney in 1999 after living in Wichita. O’Brien said in 2006 that he first started coming to Cheney when he began working with local accountant Don Albers.
“We’ve liked the city of Cheney for many years,” O’Brien said in 2006. After purchasing the stores from Coastal and establishing the KAPS chain, he said it didn’t take long to begin considering Cheney for a location.
It appears the sale won’t impact the marina at Cheney State Park, which last summer was rebranded as O’Brien’s Marina, and is not mentioned in the sale of KAPS to Yesway.
The marina is now closed for the winter. Mike Satterlee, park manager at Cheney State Park, expects business as usual come spring.
“I don’t foresee it will have any impact on us,” he said.
O’Brien took over as concessionaire at the marina in 2016, and originally opened the marina under the KAPS name.