7-Eleven Canada’s Wallace & Carey acquisition will bring "stability": Marc Goodman
7-Eleven Canada’s deal to acquire Calgary-based food distributor Wallace & Carey’s assets in B.C. and Alberta is no doubt a relief for the employees of the family-owned Calgary-based food distributor.
READ: 7-Eleven acquires Wallace & Carey assets in B.C., Alberta
The deal provides a lifeline to the 100-year-old company, following W&C and parent company Carey Management Inc.’s filing with the Companies’ Creditors Arrangement Act in June. Labour shortages, unreliable inventory demands, rising fuel prices and overall inflation was blamed, along other factors, for the company’s financial troubles in the filing.
Marc Goodman, vice-president and general manager of 7-Eleven Canada, tell CSNC the deal also makes strategic business sense for the convenience giant’s business.
“By acquiring W&C assets, we are in a position to stabilize our business so that we can get inventory back into the warehouse, fill rates back to where they need to be and, in turn, product back into our stores to meet the needs of our customers,” he says. “Being vertically integrated will help optimize routes to meet the daily needs of our stores, including products such as fresh sandwiches, wraps, fruit cups, dairy and more.”
In coming to terms of the deal, 7-Eleven worked through Calgary and Toronto-based KSV Advisory, the assigned court monitor to help find the best outcome for W&C. KSV is said to also be working out any monies, if any, creditors will be seeing returned.
Goodman says they are happy to have come to the table, particularly given they are a long-standing customer of W&C, which is currently run by Pat Carey, the third generation Carey to lead the business
“We hope the flow of inbound trucks and inventory filling our warehouses helps to bring stability and confidence to the wonderful W&C employees, especially as we move into the holiday season,” says Goodman.
W&C is one of Canada's largest independent distribution and logistics companies and had about 7,000 customers, including then-Greenergy (acquired by Global Fuels this summer) in addition to 7-Eleven Canada in Western Canada. At the time of its creditor protection filing, W&C had a fleet of 120 leased trucks and trailers and leased warehouses in nine cities across B.C., Alberta, Manitoba, Saskatchewan and Ontario, supplying some of the country’s most remote communities and to thousands of independent stores.
The assets purchased are for 7-Eleven’s own operations, says Goodman, but “we are conducting a strategic review to determine our ability and interest to service customers other than ourselves.”
Wallace & Carey also owns Loudon Bros. Ltd., a distributor servicing Northwestern Ontario, which has 500 customers, including Lactalis Canada Inc. and Labatt Brewing Co. Ltd. Loudon Bros. will continue to operate independently of this deal.
As for whether the deal will result in any staffing changes—W&C had about 650 full-time employees at the time of the June CCAA filing—Goodman says, “We value the knowledge and expertise of all employees throughout the W&C organization” and “during the transition period, all W&C personnel decisions will be made by the W&C leadership team.”
He also adds, “As we work our way through the transition service period, we hope that current W&C employees are excited about the prospect of potential future opportunities to become part of the 7-Eleven team.”
CSNC also contacted Pat Carey. He has confirmed a written comment is forthcoming this week.
Barry Prentice, director of the Transport Institute and a supply chain management professor at the University of Manitoba, says 7-Eleven purchasing a wholesale company will give it vertical integration, which comes with two big advantages.
“First, ability to control your costs, which may come with size economies in purchasing. Second, reliability of a proprietary supply chain is more assured,” explains Prentice. “Of course, all this depends on firm’s network economies. 7-Eleven Canada may be at the size where it makes sense to bear the costs of its own distribution channel. The density of stores in Alberta and BC could make this a smart managerial move.”
