Crown name vanishing from Md. gas stations

September 08, 2006|By Hanah Cho | Hanah Cho,Sun reporter

Crown, a name long synonymous with gasoline in Baltimore, is fading away in Maryland.

Two years after Crown Central Petroleum Corp. sold more than 150 gas stations and convenience stores in Maryland and Virginia, the buyer has decided to convert most of them to Chevron, Texaco or Shell stations. The move comes as dealers see national brands as a way to attract consumers with oil company credit card points and other loyalty programs in a highly competitive market.

The Crown name will remain on a few stations in the Baltimore region where there are brand conflicts, said David Noland, vice president of Petroleum Marketing Group of Millersville, which owns the outlets in Maryland and Virginia. While Noland declined to be specific, an executive with Baltimore-based Crown said five to 15 Crown stations would continue doing business in Maryland.

"It's certainly not going to be as prevalent as it once was, at least in the immediate future," said Andrew Lapayowker, Crown's vice president and general counsel. "We intend to keep it alive and hope to sign up more folks to carry the brand."

The latest development marks the continuing decline of the Crown brand, whose Baltimore roots stretch back nearly 100 years and which once used Orioles great and Hall of Famer Brooks Robinson as a spokesman. In the past decade, the company had been marred by financial troubles, a nasty proxy fight and a bitter five-year lockout of its union refinery workers before the company began selling its assets in 2003.

"They were a significant force in the marketplace," said F. Peter Horrigan, president of the Mid-Atlantic Petroleum Distributors' Association. "Over the last 10 years, they've just been adrift."

Crown once owned two refineries in Texas, 10 product terminals and 315 retail locations, including 91 in Maryland, and employed 125 workers in Baltimore and 2,500 nationwide.

Today, Crown does not own any retail outlets and refineries. It has 15 employees at its Baltimore headquarters. Its business involves licensing its brand to independent dealers and distributors. The company also operates a fleet fueling program.

Despite a reduced presence in Maryland and Virginia, Crown said there are up to 100 gas outlets in Virginia, Pennsylvania, North Carolina, South Carolina, Georgia and Alabama.

"The brand is not gone," Lapayowker said.

In 2004, Petroleum Marketing Group purchased 152 Crown gasoline stations and convenience stores in Maryland and Virginia - about 91 in the Baltimore region.

After a market study of the area, PMG decided that shifting to national gasoline brands would be a good move for the company, its retailers and consumers, said Noland, the company's vice president. Most of the Crown gas stations will become Texaco, while some will carry the Shell and Chevron names, Noland said. (Chevron Corp. owns Texaco.)

Nolan said the national brands would give the company an advantage in better pricing, advertising and marketing, and consumer credit card and loyalty programs.

"We feel right now with the advantage of the Texaco program, with the national presence that the brand has, it will be a benefit to make this strategic move," Noland said.

The rebranding process, which began last month, is expected to be completed by the end of the year, Noland said. Several area gasoline stations already have temporary signs draped over the Crown logos.

Crown's history in Baltimore dates to 1910, when Louis Blaustein founded American Oil Co., or Amoco. The Lithuanian immigrant and his son, Jacob, left an indelible mark on the oil business by inventing the drive-through filling station.

In 1930, Blaustein acquired a 48 percent stake in Crown, which went public in 1935. The first Crown gas stations opened in the Baltimore area in 1943.

After a decade of mostly good years in the 1980s, when Crown earned $181 million, the company incurred $139 million in losses during the 1990s.

In 2001, Henry A. Rosenberg Jr., grandson of Louis Blaustein and Crown president, took the company private after defeating a hostile takeover attempt by St. Louis-based Apex Oil Co.

Crown continued to face challenges in an oil industry that was being transformed by consolidation. Mergers created super-sized oil companies, which now include Exxon Mobil Corp., Chevron Corp. and BP Amoco.

After Crown began to sell off its assets in 2003 and became a brand licensing company, price volatility over the past two years significantly altered the marketplace, analysts said.

Given the unstable environment, dealers are inclined to take on national brands because regional companies such as Crown are no longer getting lower prices for unbranded gasoline, said Paul Fiore, director of governmental affairs at the Washington, Maryland, Delaware Service Station and Automotive Repair Association, a trade group in Bowie.

"With the current market, that price advantage evaporated with the Crown dealers," Fiore said. "They're probably anxious to see what kind of prices they'll put on the street with a national brand."

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