Express to Success by Jane S. Gerring
Express to Success
The Rapid Rise of Southern Express
Southern Express’ vision of the convenience store of the future is
creating lots of profit in the present
By Jane S. Gerring
To any objective analyst, the thirteen U-Tote’m convenience stores which Owais Dagra brought in 1991 would not have been considered a good investment. But Dagra not only made his acquisition a success, he also now operates one of the fastest growing “C-store”chains in the Richmond area.
With total sales of $4 million, the U tote’m chain had been losing money for four years. The company’s one profitable store, which had barely managed to keep the small chain out of bankruptcy, was not part of the deal.
The stores had been on the market for a number of years –with no takers. Meanwhile they hadn’t been upgraded, and their age was showing. Most had been built in the fifties and sixties.
“They were very outdated, dark, dingy,” admits Owais Dagra. “Frankly, nobody else was interested in touching them.”Many of the stores locations were losing their appeal also, as neighborhoods and traffic patterns changed.
In addition, Owais Dagra’s credentials as a turnaround artist were yet to be established. He was only twenty-six, with limited personal resources, and he’d spent last few years as the owner/operator of a single West End convenience store he’d purchased in 1989 from another local chain. But Owais Dagra had turned that store from a loser into a winner, and he knew the business as only an operator can.
In the four years since he bought U-tote’m, Owais Dagra has achieved a remarkable turnaround. In six months, his company, Southern Retailers, Inc., was profitable. By the end of 1994, he owned twenty stores, operating at sales rate of $25 million per year, and profits are still growing. Sales projections for 1995 exceed $30 million.
How did Dagra do it?
FINANCING THE DEAL
For Starters, he had to raise the money to buy the U-tote’m stores. He sold his own store for a modest profit and then turned to the banks for additional financing.
Not surprisingly, he was turned down by every bank – except one.
Owais Dagra found a believer in V. W. Henley, chairman of the board and president of Consolidated Bank and the Trust Company.
“He convinced me that he had sufficient knowledge to be successful in running the stores,” says Henley.” “His ideas made sense and the young man seemed to understand the business he wanted to go into”.
Owais Dagra did indeed have ideas about the convenience stores industry, and he immediately began to put them into action.
His ideas were combined into a strategy that guided the early improvements in the U-Tote’m stores and continues to guide the expansion of the company today.
His strategy was simple:
- Redesign the stores to make them more open, inviting and safe to attract more customers, particularly women.
- Change the product to reduce the labor costs while enhancing the sales of high margin impulse items.
- Develop a personnel structure and policies that attracted and retained quality personnel.