Point S: 'Growing in the Year of the Pandemic'
Point S tire dealers in the U.S. had their best year ever in 2020. They sold 19% more tire units than the previous year and increased their overall sales by 20%. The cooperative added a record number of stores, expanded into five new states and bought its second wholesale operation in two years.
This is not what Walter Lybeck, CEO of Tire Factory Inc., dba Point S USA, was expecting as an outcome after COVID-19 hit and lockdowns followed. “The first quarter was a little bit volatile. The end of March was a disaster. We were down 40-45% for a couple of weeks.”
But by the beginning of April there were signs of a recovery. Week by week sales improved. And then, as so many other retail tire dealers across the country, the arrival of stimulus checks in consumers’ mailboxes signaled a dramatic change.
“It turned on like a light switch and never turned off,” Lybeck said.
By the end of the year, Point S dealers rang up $498 million in retail sales at their 245 stores.
In Memphis, where Point S bought a partner wholesale distributor in 2019 and is working to extend its dealer base, sales in May exceeded anything the previous owner had on record. By year’s end, the cooperative added eight stores, owned by four dealers, that will receive shipments from that Memphis warehouse. That doubles the number of Point S stores served by that warehouse.
Nationally, Point S added 27 stores in 12 states, including five new states. A big piece of that expansion was the expansion by the largest Point S dealer in the country. In September 2020 Eric Gill, who had 17 Point S stores in Oregon, purchased 10 Vianor Tire Center locations from Nokian Tyres plc.
It pushed Point S to the East Coast and gives the brand a presence in New Hampshire, Vermont, New York and Massachusetts. University Wholesalers Inc. is serving as the primary tire distributor for those stores.
Lybeck said the plan is to add more stores in the northeast.
“Our goal is coast to coast. We’ve got a great partner distributor up there that has helped us with Eric’s stores. We want to have conversations with other stores,” Lybeck said.
Clint Young, chief operating officer for Point S, said “cold recruiting efforts were extremely difficult in 2020.” For much of the year there was no way to meet with dealers who might be good fits for the Point S organization. “On the flip side of that, there were store owners that were ready or compelled to sell. Some people were just ready to get out.
“The combination of what Eric did and a couple other dealers having some member-added stores helped catapult efforts,” Young said. It got to the point that “Point S is growing in the year of the pandemic.”
Another element of that growth was the cooperative’s focus on marketing. A campaign was about to go live just as COVID-19 hit, so Point S pivoted to a message that focused on community, and highlighted dealers’ role as essential.
“It was our strongest promotional year ever,” Lybeck said. “If you’re ever going to dump money into promotions, this was the year.”
The wholesale business
For the second time in less than two years, Point S bought a partner wholesaler. In October the group purchased Northwest Wholesale, the wholesale operation that was part of NRI Inc., founded by Willis Gill in 1978. Point S acquired two warehouses, one in Portland and another in Albany, Ore. Both will mostly serve Oregon and Washington customers.
But Lybeck said this is not an indication that Point S wants to be a tire wholesaler.
“We are first and foremost a cooperative, a member-owned organization supplying to member-owned stores,” Lybeck said. “We recognized that we needed to fill in gaps between our stores (when making deliveries.) So we’ve augmented our Memphis and now our Portland operation so we can increase frequencies, increase capacity and bring tires closer to our members.”
Lybeck said the wholesale operations are a supplement to its retail focus, and represent “less than 10% of our business.”