Franklin-based store chain files for Chapter 11 protection

Fuel price spike has been a triple whammy for ex-Mapco chief's ambitious convenience mart concept

Email | Print By E. Thomas Wood

Think the massive profits of the big oil companies are trickling down to your neighborhood retailer? Think again.

Horizon Travel Plazas LLC, a convenience-store chain created by former executives of Mapco Express Inc. in Franklin, filed for protection yesterday under Chapter 11 of the U.S. Bankruptcy Code. The company has shut down 11 of its 25 newly built stores across the Southeast.

Former Mapco President and CEO James Alligood and vice president of business development, Steve Ramer, founded Horizon in 2003. They saw room in the marketplace for large convenience stores that would cater to car travelers in areas normally served by truck stops. The company quickly rolled out stores in Tennessee, Arkansas, Mississippi, Alabama and Georgia.

With gas at four bucks a gallon now, however, Horizon just can't make the numbers work in its favor. Attorney Elliott Jones of Drescher & Sharp, who filed the case yesterday, said three factors converged to squeeze the company.

First, retailers pay a fixed percentage of each transaction to credit-card companies. As prices have risen, Horizon finds itself shelling out $160,000 a month more in card fees than it did a year ago. Also, naturally enough, the companies that haul the fuel to the stores have instituted a fuel surcharge to cover their increased costs.

Second, when wholesale gas prices go up as fast as they have lately, competitive pressures make it hard for retailers to raise their prices quickly and steeply enough to cover their costs.

And third, it's all your fault, Mr. & Mrs. Traveling Public. Horizon is in a business where "you make a little money at the pump and a lot of money inside," Jones explained. Margins on the gas sales are thin at best, and the retailer counts on sales of Skoal and Slim-Jims to generate profits.

But no, you people are behaving like textbook consumers, cutting back on the all-important candy and cola component of our economy as you reel at what it has just cost to tank up your ride.

Jones said he will file a plan with the Bankruptcy Court that is based on continuing to operate the 14 stores that remain open. "We believe those stores form the core of a viable company that can move forward as a reorganized entity," he said.

Yesterday's filing, available at this link, lists H.T. Hackney Co. of Lenoir City, Tenn. and Coca-Cola Enterprises of Brandon, Fla. as the creditors owed the most by Horizon. Jones said Nashville's Avenue Bank provided financing to Horizon, but it is not listed as a creditor.