Even with the acquisition of The Pep Boys — Manny, Moe & Jack and the addition of 801 stores, Bridgestone Retail Operations LLC (BSRO) says its largest distribution channel remains intact —tire dealers and distributors.
Bridgestone says it counts 5,000 points-of-sale through its dealer and distributor network, compared to the 801 stores (as of Aug. 1, 2015) owned by Pep Boys, and the 2,200 stores owned by Bridgestone.
“Our dealers and distributors remain a fundamental part of Bridgestone’s growth strategy. This acquisition does not change our commitment to these important partners,” the tire company said in a U.S. Securities and Exchange filing for Pep Boys.
Bridgestone says expanding its retail footprint and including those stores in the company’s network of operations “helps us all by building even more equity in the Bridgestone and Firestone brands.”
Pep Boys stores don’t currently sell Bridgestone or Firestone tires, and Bridgestone says it is making production moves now to ensure adequate fill rates for its existing dealers, as well as the Pep Boys stores which will gradually integrate the tire brands into their inventories.
“We recognize fill rates are critically important. The transitioning of products into Pep Boys will occur in phases to ensure we maximize total fill rates. We’re making operational improvements, including investing in additional molds for the ability to quickly respond to changes in our forecast.
“We’re also increasing our domestic supply, including much-needed sizes at key plant sites. As for the Destination and Transforce tires that were on backorder this year, we’re going to make sure those tires ship in 2016.
“We plan to increase our domestic tire production by 1.4 million tires in 2016 through capacity expansions at our Aiken County, South Carolina plant. And finally, Bridgestone’s Vietnam plant is coming online in the first quarter of 2016 and a majority of that facility’s production will be shipped to the North American market.”
The acquisition news comes shortly after the close of a Bridgestone dealer meeting. The company notes it had hoped to share the news with dealers at that time, but the transaction wasn’t yet finalized.
Upon completion, Pep Boys will become a wholly-owned subsidiary of BSRO, and will be overseen by Stu Crum, who joined Bridgestone two years ago after serving as president of Jiffy Lube International.
The deal is expected to close in early 2016.
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