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SOUTHLAND CORPORATION

SOUTHLAND CORPORATION. Southland Corporation, originally known as the Southland Ice Company, headquartered in Dallas, is one of the nation's largest operators and franchisers of convenience stores. At one time, the company operated five distribution centers and six food-processing centers and held a 50 percent interest in the refining and distribution of Citgo petroleum products. Southland Corporation grew out of the Consumers Ice Company, run by owner J. O. Jones and Joseph C. Thompson, a University of Texas business administration graduate. After college Thompson went to work for Jones, foreshadowing the convenience store business, when he successfully launched the sale of chilled watermelons at the company's retail ice docks. In 1927 Denison ice manufacturer Claude S. Dawley and several friends combined four ice plants in Oak Cliff, San Antonio, McKinney, and Sherman, Texas, including Consumers Ice, to form the Southland Ice Company. Dawley, who had started an ice business in 1909 and served as the company's first president, obtained support from Thomas Insull's financial and public utilities empire at a time when ice companies were considered public utilities, the only real source of refrigeration for goods and beverages before the mechanical refrigerator appeared in 1926. Initially, ice companies hired young women to visit homes to explain how better refrigeration could be obtained through the use of standard ice boxes than the mechanical refrigerator.

By 1928 the new Southland Ice Company operated twelve ice plants and twenty retail ice docks in Dallas and San Antonio. After one store placed a souvenir totem pole at its entrance, Southland stores came to be known as "Tote'm Stores," since customers toted away their purchases. Use of the name gave the company its first identity and unified its diversified stores. A later marketing innovation suggested by employees, who began to sell grocery items at retail ice stations and to keep longer hours, paved the way for Southland convenience stores. During the Great Depression Dawley and other original investors sold out to Insull to protect their investments, Dawley resigned, and Joseph C. Thompson, then vice president, was named president by the board of directors. The firm sank into receivership when the Insull empire collapsed, and Thompson was named as receiver. Southland recovered with the help of Dallas banker W. W. Overton, Jr., and the repeal of Prohibition, which allowed the firm to sell beer. A company reorganization plan was approved in 1934, and the firm began to integrate its holdings, moving forward to control sales and backward to acquire its suppliers of raw materials, initially, with the construction of Oak Farms Dairies in 1936 and public relations campaigns to advertise its new dairy products. By 1939 the company owned sixty retail locations in the Dallas-Fort Worth area. Company executives were known as the 7-7-7 crowd for working from 7 a.m. to 7 p.m. seven days a week, and the four-leaf clover had become the first company symbol.

Southland supplied Camp Hood, the country's largest training camp, with ice during World War II and diversified into gasoline stations. Increased business led to another reorganization, and in 1945 the firm took a new name as the Southland Corporation. In 1946 Southland commissioned the Tracey-Locke firm to rename the Tote'm stores, choosing 7-Eleven to reflect their long operating hours; they remodeled and increased their size. The 1947 purchase of Texas Public Utilities, which owned twenty ice plants, made Southland the largest ice operator in Texas. Purchase of a bottling company to bottle soft drinks for 7-Eleven failed, however, and the enterprise was sold to Royal Crown Cola. In 1948 Southland operations, including seventy-four 7-Eleven stores, were merged into the Southland Corporation, and the firm began to expand to other states. In the 1950s Southland acquired Houston's Shamrock Ice Cream Company and the Southern-Henke ice plant, acquired competitor Cabells, Incorporated, and expanded to 490 convenience stores, including outlets in Florida. Southland's development, which peaked in the decade of the 1960s, coincided with American suburban development by providing quick, all-night service near newly developed residential areas.

Joseph Thompson, who served as Southland president from 1931 to 1961, was succeeded by his sons John and Jere Thompson as Southland president. Southland incorporated in 1961 and expanded through the 1960s and 1970s, with production plants, new branches, other convenience market chains, and its first twenty-four hour stores. Franchising began in 1964, after Southland acquired 100 SpeeDee Marts in California. After 1968, when the company made its first public stock offering, it operated in thirty-eight states, the District of Columbia, and three provinces of Canada, with 36 percent of its 3,537 7-Eleven stores franchised. In 1971 Southland recorded $1 billion in sales, opened its first regional distribution center in Florida, and acquired four Hudgins truck rental companies. The company was listed on the New York Stock Exchange in 1972 and soon expanded to international markets in Mexico, Japan, and the United Kingdom, where it operated confection, tobacco, and news stores. At home, Southland introduced self-service gasoline and bought Chief Auto Parts, a California chain, which under ten years later operated 465 stores nationwide. By 1978 over 5,000 Southland stores were in operation, including 188 in Japan.

Though by the 1980s Southland had 120 subsidiaries and had acquired a video rental distribution network, a chain of dairies nationwide, and an interest in Citgo Petroleum to supply gasoline for its convenience stores, net operating income began to decline. In 1987, facing a hostile takeover by Samuel Belzberg of Canada, the Thompson family took the company private in a multibillion dollar leveraged buyout. Part of Southland's Citgo interests were sold to a subsidiary of Petroleos de Venezuela, S.A. With 12,700 stores, including 604 in Texas, Southland filed for Chapter 11 bankruptcy in 1990. Ito-Yokado Company, Ltd., and 7-Eleven Japan Company, Ltd., took 70 percent of company stock, enabling an eventual reorganization and company restructuring, but requiring the Thompson family to relinquish control. A series of divestitures streamlined operations, including the sale of Chief Auto Parts, a snack foods division, the dairies group, 1,000 convenience stores, and related real estate.

In the 1990s the restructured corporation operated over 6,000 7-Eleven stores in the United States and Canada, 222 retail units under the names High Dairy, Quick Mart, and Super 7, while area licensees and affiliates operated almost 7,000 7-Elevens in the United States, Guam, Puerto Rico, the U.S. Virgin Islands, and eighteen other countries. Of these stores, 4,545 were operated by 7-Eleven Japan Company, Ltd. Southland employed over 50,000 workers, to whom it offered profit-sharing plan benefits and the Southland Family company newsletter. In an effort to respond to the growing nationwide health consciousness, 7-Eleven stores added a number of healthier products to their convenience store offerings. Throughout its history, Southland has taken an active interest in the Dallas community. Joseph C. Thompson served as president of the Oak Cliff community association and was a member of the Dallas city council. A Joe C. Thompson Conference Center opened at the University of Texas at Austin in 1970. The company has been involved in reducing crime targeted at convenience stores and contributed to national philanthropies, including the Muscular Dystrophy Association and Jerry Lewis Telethons.

BIBLIOGRAPHY: 

Liles Allen, Oh Thank Heaven! The Story of the Southland Corporation (Dallas, 1977). Austin American-Statesman, October 25, 1990. Greg Curtis, "Behind the Lines: The Thompsons' Big Gulp," Texas Monthly, June 1990. Larry Herold, "The Empire Convenience Built," Southwest Airlines Magazine, July 1983. Dennis Holder, "Snake Eyes for 7–11," Texas Business, January 1988. Harold C. Livesay, American Made: Men Who Shaped the American Economy (Boston: Little, Brown, 1979).

Rajni Madan

Citation

The following, adapted from the Chicago Manual of Style, 15th edition, is the preferred citation for this article.

Rajni Madan, "SOUTHLAND CORPORATION," Handbook of Texas Online (http://www.tshaonline.org/handbook/online/articles/dhs02), accessed July 22, 2014. Uploaded on June 15, 2010. Published by the Texas State Historical Association.