Going it alone: Charley Jones flies solo at Stinker

Stinker Stores owner Charley Jones recently assumed full ownership of the company he joined in 2002, buying out his partner, Shawn Davis. We talked to Jones about his experiences in the Idaho convenience store landscape, and about how he’s positioning his company to someday pass into the hands of his two junior high-age sons.

Why did you buy out your partner, Shawn Davis?

I wanted to build a business I can pass on to my family, and in a partnership there’s only one end that can do that. Shawn was always planning to build the business up and cash out and do really well. That happened Dec. 5.

A big catalyst was the business success. Stinker was financially sound, and the potential changes in tax law made it a good time for Shawn to do it. He gets more money in his pocket, and it costs me less than if we did it in 2013.

What changes do you have planned for Stinker now that you’re on your own?

Nothing major. Our near-term and longer-term goal is to continue to improve Stinker. I am more interested in growing the quality of Stinker than the numbers.

We have no plans to move outside of Idaho right now. It’s too expensive; we’ve looked at the markets.

I’ve got great admiration for (competitors) Jackson and Maverick, being in multiple markets and distances. To manage people with miles in between is a big challenge. If we were to grow in another market outside of Idaho, we would need to acquire a dozen stores (to make it worthwhile financially). That’s a big financial transaction, but it may come.

Convenience store chains all sell gas, snacks, cigarettes and beer. How can one convenience store chain set itself apart?

You’ll go to a convenience store because it’s convenient. It’s not a destination shop. People get into routines, and we build our marketing around the relationships created by those routines. When you come into one of our stores, you’ll be quickly served. You’ll be greeted. It’ll be a quick, pleasant experience.

That’s our value proposition: that I offer convenience and a superior shopping experience, hopefully, to my competitor.

Sometimes they outdo me. Sometimes, many times, they have a better location than we do with a higher traffic count, easier access and a more modern store. We have older stores in older neighborhoods, so we have less cars driving by.

What past experiences prepared you for running Stinker?

I’ve had a 40-year business career. Immediately prior to Stinker, I worked 20 years at Stein Distributing Co. I was initially CFO, then vice president, and then I was president for the last five years.

I went to the University of Idaho partly on an ROTC scholarship. It wasn’t motivated by patriotism as much as a low draft number. I spent three months in Indianapolis at my officer basic course. The Vietnam War was winding down. They released me and I went straight back to Idaho and worked at a CPA firm that today is Deloitte and Touche. I like numbers; I’m a finance guy. I think I’m adept at doing strategic thinking, and trying to stay out of the tactics. I don’t like the details as much as I like the big picture.

How did you and Shawn Davis change Stinker when you took over?

When we took over Stinker, it was struggling. Stinker had 42 or 43 stores when we bought the company. Today it has got 65. Of the original stores, 13 of those don’t exist anymore. The worst store we had was on Garrity Boulevard. It was probably 30 years old, and it was not much more than a shack. In front of the cash register was a hole in the floor. That was the worst example.

We took a demoralized, financially struggling company and created a successful company that’s able to retire my partner in a lifestyle he never dreamed of. We did it by strategically thinking, being straightforward and accountable, and instituting open-book management. Each one of our store managers gets a profit-and-loss statement for their store showing the bottom-line profit every single month. We give them profit goals for every quarter, on a pass/fail basis. If you hit it, you get a bonus. If you miss it by $10, you don’t get a bonus. We routinely pay between 60 and 80 of those quarterly bonus goals.

When we bought the store, we had 400 employees; now we have 550. The most significant thing we did was kick out the old health insurance plan and give retail employees the same plan that management had. I wanted to show employees, “We respect you. We want you to live a good life. We want you to be healthy.” We pay 75 percent of the whole premium.

We provide health insurance to 200 contracts. Even though we pay 75 percent, some of our employees can’t afford it.

How do gas prices affect you?

We pay a different price every day. Our competitors aren’t necessarily buying fuel at the same price.

Demand is fixed, but customers care about the prices. The naked truth is the margins on fuel as a percentage of sales are the thinnest we have as a company. We try to make our money on fuel, but fuel is 80 percent of sales in dollars, and less than 40 percent of our gross profit. On the 20 percent of our sales that happen inside the store, they make more than I make on the gas.

How do you prepare to pass the business to your successors?

We talk about it on a regular basis. I’ve talked to my peers and friends around the community, actually across the nation, about successful family transitions, and I’ve watched other families execute this successfully. They work on it a lot. They hold their heirs accountable. They encourage them to become their own persons and communicate to them that they’ve got a big life to lead, and that’s going to be a pretty sad life if they define themselves by what dad gave them.

My goal is to work with my team and create a professional management team that doesn’t require my management or my family’s management. Then it’ll be my boys’ choice to decide if they’d like to work a career within Stinker.

I started my family at 45. When my boys are ready to take over the business I’m going to be dead. That’s kind of a gift to them; it gives them room to grow into their own people.