EG Group exit from Davenport, IA

[storewanderer]

So in Davenport, IA Kroger had a collection of old run down 70s 7-11 units running as Kwik Shops. Never knew Kroger had these locations but assume they had them a while. Probably 20 locations.

It seems EG Group did not want these locations and found a buyer for the locations a few months ago. The buyer is called Brew Oil. Brew Oil took and put Sinclair branding on the fuel. New canopies, signs, pumps all properly stickered, a complete and thorough fuel rebranding. The stores got fully remerchandised and already had pretty modern interiors left over from Kroger but no signs on the stores.

While driving around I noticed these stations had no gas and looked closed / abandoned. But one I saw a person so I went in. Inside was a partially empty store and signs stating all items 30% off store closing. Went to a couple more locations I thought were closed and they were also open and also having this sale but at 50% off. Some stores were fully stocked and others were sort of empty. Some had full coolers with all Coke, Pepsi etc available while others that stuff had been cleared.

Asked employees what happened and got a few different explanations but from what I could gather it appears the landlord does not approve of these stations having this Brew Oil as a tenant and basically told Brew Oil to buy the real estate on the sites or get out.

So I have to wonder how this went down. My guess is EG first sold the real estate and then decided to sell the stations. Perhaps this sort of maneuver is how EG makes money. It is really a shame Kroger sold the c store division.

Now I assume when the leases transferred from EG to Brew that the landlord had to approve that. I cannot imagine a business purchase being funded without that being approved.

It will be interesting to see what happens in the future involving these sites. These are pretty poor sites, old, small. One was a nice new Kroger build store but that one was also in a lousy neighborhood.

Then over in IL not too far away, EG still has some random Minit Mart units. They've stripped out all of the Cumberland Farms branding on the coffee, no longer do iced coffee, and use non Cumberland Farms cups for most of the coffee. Also no signs about the 1.29 price point but they are offering that price. Very weird operation. The employees there were polo shirts that say EG America.

[storewanderer]

Finally found a news story on this.

What a mess.

https://corridorbusiness.com/brew-oil-s ... ankruptcy/

What isn't clear is who exactly EG Group sold the stores to, as it sounds like it wasn't this Brew Sinclair operator. It appears maybe EG Group sold the stores to the group who went bankrupt.

[storewanderer]

Looking at the IA property sales it appears these were actually all corporate owned by Kroger (then EG Group) as properties owned by Kwik Shop Inc.

What is funny is the properties were sold 1/2023 by Kwik Shop Inc. for bargain prices like $300,000 to someone called IA PROP LLC then a few days later that IA PROP LLC turned around and sold the same properties to some other party (probably these folks who went bankrupt) for $1 million+.
https://cedarrapids.iowaassessors.com/r ... ppraised2=

These old run down 70's era 7-Eleven Stores probably worked for Kroger in long-owned buildings with little to no rent/lease expense as they had long been paid for (and Kroger probably hardly paid anything for them). But bring in some operator who sells the thing for $1 million and suddenly has a mortgage and debt to pay and I can see how this financing model didn't work for these extremely old outdated convenience stores.

[TempoNick]

IA PROP LLC

Probably just a shell company created by EG specifically to spin the properties off. That insulates EG from anything being wrong with the properties like contamination.

[storewanderer]

IA PROP LLC

Probably just a shell company created by EG specifically to spin the properties off. That insulates EG from anything being wrong with the properties like contamination.

Very old properties. I can't tell if they have reopened yet, it appears some may have reopened.

[TempoNick]

I looked up the ownership and it looks like EG sold them to Mountain Express Oil Company. Brew was operating the locations under an operating agreement. Mountain Express filed bankruptcy and the agreements must have been rejected.

https://corridorbusiness.com/brew-oil-s ... ankruptcy/

[storewanderer]

I looked up the ownership and it looks like EG sold them to Mountain Express Oil Company. Brew was operating the locations under an operating agreement. Mountain Express filed bankruptcy and the agreements must have been rejected.

https://corridorbusiness.com/brew-oil-s ... ankruptcy/

This Brew really got a raw deal. The stations were rebranded to Sinclair with permanent signage and canopies done; I assume the oil supplier paid for those imaging jobs and not Brew. But the inventory in the stores was all stuff this Brew put in, and they noted they donated $170k of it which is not insignificant for a convenience store operator.

I can't tell if the stations have reopened or what.

[Brian Lutz]

The way the article phrases it. It sounds like another operator bought the stations out of the Mountain Express bankruptcy and then tried to impose major rent increases on Brew, resulting in the shutdowns.