The 212 stores in Tire Factory Inc.’s network sold 6.5% more tires in 2017 than in 2016, and they increased overall sales by 8%. There was improvement in same-store sales — dealers who have rebranded to the Point S banner increased sales by 5.5%, and those who haven’t were up 3.5%.
The cooperative also expanded in 2017. With 20 new locations in 11 states, the new stores were, on average, a part of the cooperative for about half the year. They added 48,000 units and $4.5 million in sales.
That’s a lot of momentum, and Walter Lybeck, CEO of Tire Factory, said the group won’t rest in 2018. It has kicked off the year with a new relationship with Michelin North America Inc., which Lybeck is certain will help the cooperative increase its tire unit sales again.
Tire Factory asked its 127 members what tires they most often purchased from another source, and Michelin products were the overwhelming answer. Dealers previously could order the Michelin family of brands from the tire maker’s wholesale arm, Tire Centers LLC (TCi). Some dealers found another outlet.
So Tire Factory has spent the past year working with Michelin to create a program for its dealers. Lybeck said there never was a hint that Michelin was on the verge of merging TCi with the wholesale operations of Sumitomo Corporation of the Americas. That mega merger was announced Jan. 3.
Michelin joins Hankook Tire America Corp. and Goodyear Tire & Rubber Co. as preferred tire manufacturers for the North American group of Point S dealers. Representatives from Michelin’s consumer and commercial divisions met with dealers during Tire Factory’s annual dealer meeting in February. At the same time Michelin’s passenger and light truck tire products — that includes Michelin, BFGoodrich and Uniroyal brands — were being added to the cooperative’s four warehouses.
Asked if any of the group’s other preferred vendors had expressed concerns about the new relationship with Michelin, Lybeck said, “My Michelin target is not any other brands that we have in our warehouse. My Michelin target is other wholesalers that currently sell Michelin and BFG to my members.”
Globally, Point S has preferred partnerships with Nokian Tyres plc, Continental AG and Pirelli & Cie SpA. For off-the-road tires and industrial tires, Balkrishna Industries Ltd. and Camso Inc. are preferred vendors.
All eyes on Memphis
Ninety percent of the cooperative’s dealers have rebranded their businesses to Point S, and leaders are working on their long-standing goal of expanding the network into the eastern half of the U.S. They took a big step toward that goal in December when Tire Factory announced it was opening a warehouse in Memphis, Tenn., and partnering with Nussbaum Distributing Inc. to expand and deliver tires in the Memphis region.Mike Nussbaum, owner of the Memphis-based distributor, attended the annual owners meeting, as did two Memphis-area dealers who are considering joining the cooperative and rebranding their combined three stores to Point S. Clint Young, director of sales and business development for Tire Factory, said a week before the dealer meeting leaders had gone to Memphis to meet with eight tire dealers in the area who own 13 stores.
Tire Factory also has hired its first Memphis-area employee. Brandy Ma spent 23 years working for Del-Nat Tire Corp. She’ll manage the Memphis warehouse.
“We need Memphis to succeed,” said Lybeck. “That’s absolutely our focus for growth right now.”
In addition to Memphis, Tire Factory is working to expand its reach in Oklahoma. Two dealers, David Priddy, in Haskell, Okla., and Garth and Lisa Williams in Stillwater, Okla., operate both retail and wholesaling operations. Tire Factory has created a program so they can work to recruit customers to Point S in that area. Those customers would order tires through Tire Factory and Priddy and the Williamses would handle the distribution and be paid a distribution commission. “Our intention (with both Memphis and Oklahoma) is we’re creating a model we can duplicate across the country,” Lybeck said. ?