CHESTER CADIEUX, chief executive of convenience-store and filling-station chain QuikTrip Corp., is glaring mad. He's standing in front of store number 56, just off Interstate 244 outside of downtown Tulsa. "It's too ugly," he mutters, pointing to the store's red-and-white facade. Bye-bye, number 56. It is slated to be closed this year.

It's not that number 56 is losing money. Cadieux says it netted $80,000 last year-three times the industry average of $26,100. "A lot of people would say closing number 56 is just insanity," says Cadieux. They would, and they'd probably say the same about 44 other stores, all profitable, that Cadieux plans to close over the next two years.

There's shrewd merchandising method in Cadieux's apparently cavalier attitude toward profits. The store closings are part of a strategy that Cadieux, 66, has been honing for 20 years. Here's what he thinks: Even if a store is profitable, it is less likely to build repeat business if it is unpleasing to the eye and out-of-date; that makes it a lousy long-term investment.

Cadieux runs 330-odd stores, mostly in Tulsa, Atlanta, St. Louis, Wichita, Des Moines and Kansas City. They are high-volume, low margin retailers of gasoline, beer, soda, junk food and cigarettes. He wants customers to think of his locations not as shops of last resort but as places they enjoy visiting.

The high standards pay off. In fiscal 1998 Cadieux's closely held QuikTrip sold $1.9 billion in convenience items-a fivefold growth in a decade generating cash flow of $89 million and net income of $32 million. This, at a time when many of the major convenience chains like Circle K, National Convenience Stores and Southland Corp.'s 7-Eleven filed for bankruptcy and are just now recovering.

Cadieux understood that as convenience stores proliferated, convenience would become a commodity. "Convenience has value [only] when there isn't much of it. We just focus on being good retailers," he says.

Cadieux is regarded as something of a heretic in the trade. Most players, like Southland and big oil companies such as Texaco and Mobil, still believe customers will pay a premium for the convenience and the branded gasoline. Stores are cramped and prices are high. They get the premium prices, but they don't get volume.

Result: The average QuikTrip store sold $2 million of merchandise and 3 million gallons of gas last year. The average store for Southland, which fi-anchises and operates 5,100 7-Eleven stores in the U.S., sold $955,000 of merchandise. Convenience stores that also sold gas averaged 720,000 gallons. Says Eric Spiegel, a consultant for Booz, Allen & Hamilton: "All the majors want to study them. They know QuikTrip outperforms them, but they don't know why."

Now they do. Whether they can copy the master is another question.

Cadieux's father, of French-Canadian descent, moved from Chicago to Tulsa and worked for a small oil company. Cadieux and a schoolmate first opened a store in a small Tulsa strip center in 1958, a few years after Cadieux graduated from the University of Oklahoma. The initial capital was $16,000; Cadieux borrowed his $5,000 share from his father. Later, suppliers came up with enough capital to help him expand the chain.

Initially Cadieux copied competitors: high prices and little selection. After four years in business, the company was eking out a profit of $25,000 on sales of $1 million, and competitors were springing up all over the place.After expanding over the next 15 years or so, Cadieux realized the business was overbuilt. Then he exhibited real foresight. First he narrowed his focus to quantity items: branded beer, soda, cigarettes, coffee, candy and later gas. Out went slow sellers like canned vegetables. He slashed prices, reducing his in-store gross margin to a current 25.5%, versus 32% for the industry.Cadieux started adding gas in the early 1970s, but made it a major offering only in the late 1980s and early 1990s, when oil companies began serious encroachment on convenience stores. Here again, he takes a smaller gross margin to move more merchandise. His cut is 9.5 cents per gallon, compared with IS cents for most major oil companies. But his stores sell, on average, up to 75% more gas than the major oil company stations, estimates Booz, Allen's Spiegel. QuikTrip is the biggest gas retailer in Tulsa and Kansas City and the third-biggest in St. Louis and Atlanta, according to New Image Marketing of Fort Myers, Fla. When he speaks of keeping his stores attractive, Cadieux doesn't just mean decor. He believes a service business should be manned by smart, motivated people. A QuikTrip store manager earns, on average, $48,000, compared with $25,000 for the industry. Cadieux is planning a push into Dallas, 7-Eleven's heartland. His potential competitors are nervous, but they don't seem to be copying Cadieux's strategy very much. Maybe it's because they are run by pencil pushers rather than by merchants.

Fill 'er up