The Dake family, owners of Ballston Spa, New York-based Stewart’s Shops, are readying to sell their 60% stake in the convenience-store chain to its employees over the next 20 years.
The news was first reported in the Albany Business Review.
Robin Cooper, Stewart’s Shops’ public relations manager, confirmed the news with CSP, including that company President Gary Dake, 63, and his father, Bill Dake, company chair, 89, also have identified successors to lead the company. Bill and Gary are the final generations of Dakes in leadership, the Business Review said.
Stewart’s Shops employees own 40% of the c-store chain, the report said, adding that the employee stock ownership plan (ESOP) had assets of approximately $877 million as of July, citing federal filings. There are close to 5,000 ESOP members.
“If we sold out, they’d change everything.” —Bill Dake
Selling the family’s stake “is part of a plan for the Dakes to intentionally place one of the Albany region’s most successful companies in the hands of people they believe will preserve the culture of Stewart’s for the long term,” Bill Dake told the Business Review. “If we sold out [to someone else], they’d change everything.”
While Stewart’s Shops is a privately owned family business, “The next generation of Dakes doesn’t live in the company’s market area and isn’t as emotionally attached to the business,” the report said, adding that the company has been most successful when promoting from within. “So the sale of the family stake to employees will be the continuation of those values and culture,” it said.
“[We’re] trying to build that culture through the ESOP where the senior management team feels like they're owners enough that they aren’t afraid to act," Gary Dake told the newspaper. “Because you look at the dumb stuff that people even in public corporations do, it’s usually risk aversion. Because, ‘If I do what everybody else did, nobody can criticize me.’ Having the guts to say, ‘Everybody's going right, we're going to go left,’ is really hard to do, but ownership helps you do that.”
Tradeoff
The family is potentially leaving money on the table by not selling to another large company, Gary Dake told the Business Review. He said that a sale could perhaps be for 20% more than the ESOP; however, the family is OK with such a tradeoff. If another large c-store chain purchased the company, “They’d immediately eliminate assets they don’t need and could stop the company’s $9 million of annual charitable contributions,” the report said.
Gary Dake told the Business Review: “Short term, they don’t need a dairy plant. They don’t need this office. They don’t use their own distribution ... so first thing they would do, that's about 700 people they would just put out of work.
“We’d be hurting our communities. We’d be hurting our co-workers,” Gary Dake said. “I plan to still live here. I wouldn’t feel right about what I did.”
- Stewart’s Shops is No. 23 on CSP’s 2024 Top 202 ranking of U.S. convenience-store chains by store count.
Founded in 1945, Stewart’s Shops is an employee- and family-owned c-store chain known for its milk, ice cream, coffee, Easy Food meals and other convenience items. There are 357 Stewart’s Shops in upstate New York and southern Vermont.
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