Coming off a year in which it made several significant acquisitions even as its growth in new travel centers slowed somewhat, Love’s has an aggressive plan for 2024 that might include new growth in its factoring business.
In a news conference earlier this week, Love’s President Shane Wharton said the company’s plans to open about 20 to 25 new locations in 2024, which will result in about 1,500 to 2,000 new truck parking spots. Wharton said that number means the company is closing in on 50,000 parking spots through its network of 640 locations in 42 states.
Wharton said the most significant acquisition the company made in 2023 was its purchase of TVC Pro-Driver. In the October prepared statement announcing the acquisition, TVC Pro-Driver was described as a CDL “protection subscription service … assisting individual drivers and fleets in reducing or dismissing fines, preventing downtime for court and protecting compliance safety and accountability (CSA) scores.”
“Obviously, if they don’t have a CDL they don’t have a job,” Wharton said. He described a situation where TVC would get involved: a driver gets a ticket in the Chicago area, But he’s based near Los Angeles. TVC has a network of attorneys ACROSS the country set up to handle that issue.
“It may be hard for the driver to physically to get to Chicago, so TVC can handle that for them, and help manage the amount of points that ends up on their CDL record,” Wharton said.
One area where Love’s did not make an acquisition in 2023 was in its factoring arm, Love’s Financial.
“We wanted to but we just didn’t see the right opportunities,” Wharton said of sitting pat with its existing factoring business.
But Wharton suggested that growth in factoring is still on the Love’s agenda. “We’re thinking we may see the right opportunities this year,” he said.
Echoing what so many others in the factoring industry have said, Wharton described the business as “fragmented.” If Love’s is going to stay and grow in the business, Wharton said, “we want to be the best in class and we want it to be large so that we can offer a good value proposition to our customers. We intend to grow that business and be one of the top players.”
While most of Love’s growth in its network of stores has been organic, it did make a niche-driven acquisition in April when it bought EZ GO from Carey Johnson Oil Co. It was a niche purchase because EZ GO has six travel stops on Oklahoma turnpikes and five on the Kansas Turnpike, as well as other convenience stores in Oklahoma and Nebraska.
Interstate highways do not have travel stops except for those sections that would also be considered state turnpikes. The restriction on commercial operations on the interstate highways that don’t fall under that exception goes back to the beginning of the interstate highway system and generally is considered sacrosanct by the truck stop industry.
“We’ve seen really good results from that,” Wharton said of the EZ GO acquisition, noting that Love’s previously had no presence on state turnpikes. “So we’re looking at other opportunities and other states specific to turnpike systems because those come up for bid every so often. We’re going to keep our eyes open for that.”
Love’s growth in parking spots in 2024 will be on the low side compared to recent years. For several years, Love’s has put out press releases at the beginning of the year, previewing its expansion plans. Every press release between 2018 and 2022 projected 3,000 new parking spots. Love’s preview for 2023 didn’t mention the number of new parking spots planned for that year, but its projection of 25 new travel centers last year was less than in earlier years — which frequently came in at close to 35. Last year’s openings resulted in about 2,000 new parking spots, a Love’s spokeswoman told FreightWaves earlier this month.
Love’s, which does not charge for its parking, wrapped up 2023 by opening four new sites in about a week’s time — Salinas, California; Michigan City, Indiana; Nicholson, Mississippi; and Watertown, New York. That added 377 parking spots.
“Whenever we’re evaluating a site, we’re obviously looking at what the traffic is in that particular lane,” Wharton said of the challenges of finding new locations for travel centers and by extension new spots for parking. “But many times, getting that perfect piece of real estate for a travel stop doesn’t exist. It’s hard to find real estate to build a travel stop on.”
The number of new parking spots “is going to correlate, as you would expect it would, to the number of new locations we opened,” he added.
He said Love’s also has gone to older existing sites where there was available land for expansion and added spots. “As you might imagine, that’s harder to do,” Wharton said. But he said in the last year, “we were able to do a little more of that. But there’s only so much we can do.”
Wharton also reviewed an ambitious plan for renovation of 35 to 40 stores and a total rebuild of four others.
In 2023, Love’s was the only one of the big three travel center companies that didn’t go through an acquisition, and the two sales that did take place didn’t come without controversy.
Pilot Travel Centers became majority-owned by Berkshire Hathaway (NYSE: BRK.B) in January 2023. The founding Haslam family was set to exercise its option to have Berkshire buy the last 20% it didn’t own this month, but a dispute over accounting practices resulted in competing lawsuits. The dispute was settled just before a trial was to begin earlier this month in Delaware Chancery Court. The sale of the 20% then proceeded.
Travel Centers of America was a publicly traded company that BP announced it was acquiring in February. Convenience store operator Arko (NASDAQ: ARKO) launched an effort to acquire TA for a price that on the surface appeared to be worth more than the BP (NYSE: BP) offer. But the TA board ultimately stuck with the BP bid and that sale was completed in May.
That Love’s had an uneventful year in its ownership was noted early in Wharton’s presentation. “We think it makes a difference in how we run our business and how we take care of our customers,” he said, ticking off various second- and now-third-generation members of the Love family still involved in the company.
But there was change even for Love’s in 2023: founder Tom Love died at age 85 in March. He died one year before Love’s is celebrating 60 years in business.
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