Survival of the fittest
Change has been the operative word for North America's largest independent tire dealerships and distribution groups during the past year -- starting at the very top.
Penske Auto Centers LLC (PAC), the continent's biggest independent tire store chain, exited the business three months ago by closing 563 stores in 44 states with no prior warning. PAC made the decision one month after it shut down 63 outlets when minority shareholder Kmart Corp. closed 284 stores. Individual PAC stores had been profitable, according to PAC CEO Jim Wheat, but the company "never made a profit" overall. "We never got over the hurdle of having enough store contributions to get over the infrastructure we had." Selling an average of seven tires a day per store didn't help the situation.
Penske Corp. had been selling tires since 1995, when it acquired 875 auto service centers from Kmart. Discount Tire Co. replaces PAC in the number-one slot.
Last year's second largest dealership based on store count, Morgan Tire & Auto Inc. (now Tires Plus), is no longer truly independent. Bridgestone/Firestone Americas Holding Inc. (BFAH), then Bridgestone/Firestone Inc., bought a 52% stake in the company last August. Larry Morgan, Modern Tire Dealer's 2001 Tire Dealer of the Year, recently relinquished his chairman, CEO and president duties at Morgan Tire.
Tire Kingdom Inc. grew to 208 outlets through a series of acquisitions that included Northern States Tire, a New England wholesale and retail chain, last summer, and Mueller Tire & Brake Inc., a 19-store dealership based in Cleveland, Ohio, in February. Tire Kingdom opened 10 new stores during the first half of 2002 and is preparing to open two new shops in Jacksonville, Fla.
Winston Tire Co. had a tough year. The Torrance, Calif.-based chain filed for bankruptcy in January, listing its debt at more than $100 million. Winston has since closed 20 stores. There are no plans to shut down any more, says Winston CEO Bryant Kountz.
Kal Tire began its push into Canada's eastern provinces several months ago by injecting capital into three Ontario-based dealerships: J&M Tire of Oshawa, Timmins Tire and The Tire People. The companies remain autonomous, according to Kal Tire officials. This differs from the chain's traditional acquisition-based expansion strategy.
Heafner Tire Group experienced its share of shake-ups, including a name change to American Tire Distributors earlier this month to better reflect its national scope. In April, Heafner bought back and retired more than $121 million in senior notes as part of its financial restructuring plan. That same month it sold and leased back three warehouses. Last October, Heafner sold its 29-store T.O. Haas retail division to a group consisting of some T.O. Haas employees.
Somerset Tire Service Inc. (STS) (in photo with President Bill Caulin) accelerated its already-aggressive expansion pace late last year by purchasing Ramapo Discount Tire Centers and Wholesale Tire Co. Ramapo, headquartered in northern New Jersey, brought seven outlets to the STS fold. Wholesale Tire Co. had 18 locations throughout Long Island, N.Y., and New York City. STS also opened five new outlets, including a "clearance center."
Kimmel Automotive Inc. exited the retail tire business in March by selling its 34 stores, plus a retread shop, to Monro Muffler Brake Inc. Monro will continue to operate the locations under the Kimmel banner. AM-PAC Tire Distributors increased its store count, thanks, in part, to its buy-out of Phoenix, Ariz.-based Charlie Case Tire Co. The deal included retail and wholesale locations.
Full speed ahead
Many dealerships and distributors are poised for growth during the next 12 months.
* A to Z Tire & Battery Inc. will relocate and expand two stores.
* Advanced Auto Service & Tire Centers has three new stores on the way.
* Ben Tire Distributors Ltd. will expand its Springfield, Ill., warehouse.
* Burggraf Corp., based in Quapaw, Okla., will open a new, 8,500-square-foot service center in Joplin, Mo., this October.
* Callaghan Tire plans to expand its presence in the Miami, Fla., market.
* Carroll Tire Co. wants to add two or three new warehouses.
* Chabill's Tire Service Inc., which is based in Morgan City, La., will open two more outlets in Louisiana.
* Commercial Tire Inc., based in Boise, Idaho, will add a new facility in Meriden, Idaho.
* Delta World Tire Co. wants to add one or two outlets over the next 12 months.
* Direct Tire & Auto Service is planning two grand openings in New England, one this fall and the next in spring 2003.
* Dunlap & Kyle Co. Inc.'s latest warehouse is slated to open this month; it also is building three new stores that will open by the end of 2002.
* Englewood Tire Discounters Ltd. will open a new warehouse in Long Island, N.Y., plus a retail shop.
* Everybody's Oil Corp., which does business as Tire Barn Inc. in Indiana and Illinois, is adding stores in Avon and Bloomington, Ind.
* Fletcher's Tire & Auto Service Inc.'s latest store will open next month. Two more are scheduled for 2003.
* Fountain Tire Corp. is planning acquisitions in Manitoba, Saskatchewan and British Columbia.
* Frisby Tire Co. Inc., based in Ottawa, Ontario, will open a location in Gatineau, Quebec, this year.
* Ganin Tire Co., headquartered in Brooklyn, N.Y., will add two to three more outlets within the next 16 months.
* Goodguys Tire Centers will open a store in Clovis, Calif., next month.
* Graham Tire Co. will open three new stores.
* Jack Williams Tire Co. will add five to seven more retail outlets by the end of the year.
* Leslie Tire Service plans to add one store.
* Martino Tire Co. is adding two new retail centers.
* Mavis Discount Tire, based in Mount Kisco, N.Y., is building five new shops that will open before the end of the year.
* Mitchem Tire & Wheel will add one more location.
* Mountain View Tire & Service Inc. plans to open four more stores this year, including three in its Los Angeles, Calif., region.
* Northwest Tire Factory LLC wants to add 12 to 15 new dealerships annually, says Nick Hodel, the group's CEO. (It added 17 dealerships during the last year.)
* Pearson Tire in Richfield, Utah, has another wholesale center on the way.
* Pete's Tire Barns Inc. will add two outlets in the next six months.
* Plaza Tire Service is building two stores that will open next month. It also will add three to four more locations in the near future.
* President Tire Canada plans to establish 15 franchises in Nova Scotia within a year and will build a new warehouse in Calgary, Alberta, before year's end.
* Pueblo Tires & Service will add two outlets to its total.
* Purcell Bros. Auto Service & Tire Centers will add a new store.
* Service Tire Truck Centers will open a service center in Newcastle, Del.
* Sullivan Tire Co. Inc. will open three new retail locations.
* Target Tire will add an 11th distribution center by the end of 2002.
* Tire Warehouse Central Inc. is planning three or four new stores, including locations in North Adams and Ludlow, Mass.
* VIP Discount Auto Centers will add five to seven retail outlets. The first one is slated to open in November.
Warren Tire Service Inc., Wholesale Tire Distributors and White Tire Distributors also have new stores in the works.
Dealerships and distribution groups reporting new locations during the past year include: AB Tires Inc., Action Tire Co., Advanced Auto Service & Tire, Alan Brown Tire Center, Antioch Tire Inc., Barron Tire, Bauer Built Inc., Ben Tire Distributors Ltd., Big O Tires Inc., Black's Tire Service, Bob Sumerel Tire Co., Cassidy Tire & Service Inc., City Tire Co., Coast Tire & Auto Service Inc., Delta World Tire, Discount Tire Co., Dunn Tire Corp., Easter Tire & Retreading Inc., Englewood Tire Discounters, Fletcher's Tire & Auto Service, Free Service Tire Co. Inc., Ganin Tire Co., Graham Tire, Gregg Tire, Homann Tire Ltd., Jack Williams Tire, Levin Tire Center, Maple Tire Centers, Martin Tire Co., MFA Oil Co., Mike Gatto Inc., Mountain View Tire & Service, Mr. Tire Inc., President Tire, Raben Tire Co., Remington Tire Distributors Inc., Rosson & Troilo Motor Co., Service Truck Tire Centers, Southern Indiana Tire Inc., Sparks Commercial Tire Inc., Sullivan Tire Co. Inc., Tire-Rama Inc., Tire Warehouse Central Inc., Valley Tire Co. Inc., Vespia's Tire & Auto Service Centers Inc., VIP Discount Auto Centers, Warren Tire Service Center, White Tire Distributors and Wholesale Tire Distributors. Mexican dealerships Llantas y Refacciones de Matamoros and Servicio Maximo S.A. also expanded during the past 12 months.
MTD ups the ante: List now reflects double the dealerships
Modern Tire Dealer's tradition of listing the top independent tire store chains and distribution groups based on retail, wholesale and commercial outlets dates back to 1989, when we started listing the top 25 dealerships and top 20 franchisers in the United States and Canada. But as more major players emerged and existing dealerships consolidated, MTD expanded its lists to more accurately reflect changes in the market.
In 1998, our independent tire store chain list expanded to 50 dealers instead of 25.
This year, to provide an even more comprehensive, detailed overview of the North American market, we have listed the top 100 independent tire dealerships based on number of outlets. (You can view the charts in our statistics Web pages.)