Tire Factory Buys a Tennessee Tire Distributor
Tire Factory Inc. has acquired Nussbaum Distributing Inc., the Memphis-based tire distributor it partnered with at the end of 2017 to expand its reach into the eastern U.S. Leaders from Tire Factory, the cooperative whose dealers operate under the Point S brand name, say the acquisition of Mike Nussbaum's tire distribution business is a sign of the group's intention to remain focused on growth. According to a letter to Nussbaum's customers, the acquisition was effective Sept. 1, 2019.
Walter Lybeck, CEO of Tire Factory, says, "This is exciting news for all our members. Our growing footprint puts a demand on having the right tires in stock and delivered when our dealers need them. This investment shows our commitment to our existing members and future prospects in the market and to our vendor partners who have supported us so well over the years. Combined, our warehouses in Memphis will exceed 100,000 square feet of warehouse space to service Tennessee, Arkansas, Kentucky, Mississippi, Missouri and Louisiana."
In early 2018 when a Point S warehouse opened in Memphis — blocks away from Nussbaum's warehouse — it did so with the plan of Nussbaum's drivers and trucks delivering the tires new Point S dealers ordered. Nussbaum added the Point S stores to its existing routes.
Point S has six stores in the area.
In all, Point S dealers have 220 stores in 19 states, and they order tires from warehouses in four locations: Memphis, Portland, Ore.; Salt Lake City, Utah and Denver, Colo. Combined, those warehouses have more than 450,000 square feet of space.
Clint Young, chief operating officer for Point S in the U.S., says, "Our growth model is strategic. We've built our success in adding members that are focused on tire sales and have an appreciation for joining a group that values their independence.
“We have demand from independent tire store owners in the market who wanted to partner with Point S. Mike Nussbaum is a great partner to launch with into the market with his 20 years of experience in wholesale. He built a successful framework and delivery routes to help us find solutions for onboarding new members. By combining our efforts into one operation, we can improve service and product availability to our independent tire dealer members and the wholesale market in Memphis.”
Nussbaum started his tire distribution company in 1986. In his letter to customers, he says he and his wife Joyce are retiring. "We wish to thank all of our loyal tire partners for many years of mutual success! We have appreciated our relationship with each of you, and we wish you much continued success!"
He says Nussbaum tire customers should only notice one change — "increasing access to many major brands."
In December 2017 Nussbaum told Modern Tire Dealer he thought the partnership with Point S would be mutually beneficial.
"I think it's a very complementary offering in that they tend to focus on major brands, and we tend to focus on entry level, so we have complementary inventories. The customer base is different. The offerings are different. There's a lot of synergies out there."
Lybeck says Point S remains committed to helping its independent members grow their businesses.
“We define expansion by the growth of our existing member base. It’s their increase in sales that define how we expand and define success as a member-owned cooperative,” said Lybeck. “It all boils down to delivering upon our promise to our membership of having tires their customers expect at a great value. This philosophy has allowed Point S double-digit growth for the last two years, and continued growth in units this year.”
The cooperative called this year's unit growth "record breaking." That comes off a strong 2018, when sales increased by 10%.