Billionaire Russell Withers and the family of his late sister Beverley Barlow could reap $2bn or more from the sale of the nation’s largest convenience and fuel retailers 7-Eleven.
Mr Withers and the Barlow family have put 7-Eleven on the block in a process that will see the brand’s Japanese global owner join the bidding for a business that is making more than $4.5bn in annual sales and has pre-tax profits of at least $200m.
The business has emerged in recent years from a wages scandal in 2015 when underpayment of salaries was found to be rampant, into a network of about 750 stores across Victoria, New South Wales, ACT, Queensland and Western Australia.
Mr Withers has kept a low profile since the scandal, which saw him step down as 7-Eleven chairman and also resign his role on the Australian Olympic Committee.
“The company has made significant progress in recent years on a number of fronts and is performing well under a highly credentialed management team, with an exciting outlook for growth,” Mr Withers said in a statement on Monday.
“From a single store in suburban Melbourne in 1977, 7-Eleven Holdings has grown to be Australia’s largest private fuel and convenience retailer … processing 250 million transactions each year, and supporting the employment of more than 9,000 people across the corporate and franchise network.”
Russell Withers: ‘The company has made significant progress in recent years on a number of fronts and is performing well under a highly credentialed management team, with an exciting outlook for growth.’
As such the Withers and Barlow families have decided that the time is right to review options for the future ownership of the business with a view to setting it up for future growth and success, Mr Withers said.
7-Eleven is the largest convenience retailer on the eastern seaboard of Australia and claims to have a market share of about 38.5 per cent in the region. It also claims to be the largest independent fuel retailer on the eastern seaboard, with fuel stores selling Mobil-branded fuels.
The 7-Eleven owners have appointed Perth based advisory firm Azure Capital to manage the sales process, which is expected to include Japanese retail conglomerate giant Seven & I Holdings, which owns 7-Eleven in markets such as Japan and North America.
The sale will come only months after Adelaide billionaires the Shahin family sold their On The Run chain of convenience stores to Viva Energy in a $1.15bn transaction.
The 7-Eleven process is at an early stage and is expected to take a number of months, but is for 100 per cent of the Australian business. Global private equity firms are also expected to express interest in the sale.
The Withers and Barlow families will maintain their ownership of the Australian arm of the Starbucks coffee business, which they brought back to the country in 2014 after the American parent company had closed previous operations.
Founder of 7-Eleven Masatoshi Ito dies at 98
7-Eleven chief executive Angus McKay told The Australian that the business had recovered from disruptions caused by Covid lockdowns and that its cheaper prices for coffee and food meant it was attractive to consumers as cost of living pressures increased.
“It is a great time to be in convenience [retail]. Covid reinforced a lot of habits in people in terms of not wanting to travel far and so the close proximity of our stores has been perfect for us.
The better we make our food offering, and I include coffee in that, the more that people want to come in, and we’ve been doing a lot of work on future proofing our business in terms of solving the convenience issue for our customers.”
Chairman of 7-Eleven Holdings Michael Smith said 7-Eleven has an unrivalled brand and convenience footprint in the attractive fuel and convenience market in Australia.
“The business has great momentum and a compelling strategy for growth across convenient food, the continued transformation of our total merchandise offer, digital and format innovation, and new stores,” Mr Smith said.
“With such a strong platform in place, the shareholders have decided that the time is right for new ownership of the business to oversee the next phase of our growth and development.
“Across our network of stores, it’s business as usual and our focus is on our customers and being the first choice in convenience retailing in Australia.”
The business is well known for products including slurpees and $2 coffees. Mr Withers and his family brought 7-Eleven to Australia in 1977, opening the first store in Melbourne’s Oakleigh.
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