TravelCenters of America Inc. announced that it has commenced a company-wide reorganization, which is a key step in the Company’s strategic, long-term plan to improve its operational efficiency and profitability.
The reorganization plan includes significant leadership changes with the addition of new senior vice presidents for a newly created hospitality department, under which the areas of restaurants, gaming and convenience stores will be consolidated, as well as in information technology.
TA has also appointed a new senior vice president of corporate development, a new department initially tasked with delivering on the company’s reorganizational initiatives. Key among these initiatives is the creation of a centralized procurement group to drive economies of scale in pricing, provide increased leverage in vendor negotiations and ultimately lead to substantial purchasing savings and a streamlined operation. Other key initiatives are focused in areas of opportunity for realizing both costs savings and increased revenues, including merchandising in the convenience stores, over-the-road delivery, truck repair training and staffing and IT systems.
These new leaders bring decades of valuable experience as well as initiative, critical skills and new visions and approaches to these critical, but underperforming, areas of TA’s business. In addition, as part of its reorganization plan, TA is reducing its corporate headcount by a total of approximately 130 and eliminating certain positions. These changes are expected to generate net annual savings of approximately $13.1 million in selling, general and administrative expense.
“Since joining TA in December, I, together with TA’s senior level management, and under the oversight and direction of TA’s Board of Directors, have been focused on developing a plan to cost-effectively optimize the strengths of our organization in order to transform the company,” said Jon Pertchik, Chief Executive Officer of TA. “By reorganizing and enhancing our leadership team, we have taken the first formal steps in executing TA’s turnaround by repositioning management, redefining management roles and operating focus and strategically adding new management who bring new and valuable experiences, skills and outlooks to TA, while also focusing on right-sizing historical SG&A growth, which has significantly outpaced revenue growth over the past decade. I am confident that the team that we now have in place is the one to take TA forward.”
“We have worked hard on planning and developing the reorganization and transition plan announced today. I believe that this plan will result in major changes in efficiencies and improvements to TA’s business and position it well for future success.” added Pertchik.