Tire Factory’s New CEO Outlines 3 Paths to Growth
Walter Lybeck sees plenty of growth potential for Tire Factory Inc. And after a couple weeks as the cooperative’s permanent CEO, he outlined his strategy to pursue that growth during an interview with Modern Tire Dealer.
Lybeck is passionate about independent businesses of all kinds. When he was an auditor at Deloitte, he managed a small team and enacted “pick a dive Friday.” Every week the team would go out, and the only rules were their destination had to be an independent establishment, and it had to feel like it was independent. It gave him a glimpse into business strategies of every variety. “It’s amazing what people do when their livelihoods are on the line.”
He sees that same passion in Tire Factory’s dealers, and wants to expand the cooperative’s reach as members rebrand their stores to Point S Tire and Auto Service.
“There are all sorts of different ways to do it. The challenge is bringing those gaps,” Lybeck says. He sees it as three objectives.
- Internal growth: “I always have internal growth as a goal for myself. If I’m not growing internally, if I’m not capturing lost sales within my network, there’s no point in growing.” Lybeck says that means Tire Factory needs to provide excellent service to its stores, and one key to that service is competitive pricing.
- External growth, part 1: Seek partnerships with other independent dealer groups, especially smaller groups, around the country, and “use those as launching points for adding additional stores.” Existing groups would already have a warehouse in place and a network of stores, and it would help Tire Factory expand into the eastern U.S. As an example, if Tire Factory tied into an existing group in Georgia, then it would make growth in other large markets around Georgia more likely. “We have several conversations going. I would love to land one of those this year.”
- External growth, part 2: Growing from west to east. Based in Portland, Ore., Tire Factory's stronghold has always been in the western U.S. “We don’t have enough members in Colorado. We are just entering North Dakota, South Dakota. We could use more. The whole middle of the country, those are the next natural spots.” Moving south into California, Phoenix, Ariz. and Las Vegas, Nev. are also targets that would require a bigger distribution system. Tire Factory currently operates from warehouses in Portland, Ore., Salt Lake City, Utah, and Denver, Colo. with a combined 300,000 square feet of space. The Denver warehouse is smaller than the other two.
Any growth is predicated on a good balance sheet, says Lybeck, who served as Tire Factory’s chief financial officer from 2010 to August 2015 when he took over as interim CEO. He says the group’s balance sheet is “very good.”
“We don’t want to leverage ourselves to risk,” Lybeck says. “If you’re not planning for the unexpected financially you can be surprised, and we don’t want to find ourselves surprised.”
Read more about Tire Factory's future plans here:
See photos from the Tire Factory 2016 annual meeting here: Photos: 2016 Tire Factory Dealer Meeting