Wholesale Distribution

Myers Tire Supply Devises a Distribution Transformation Plan

Bob Ulrich
Posted on April 16, 2019
“Nothing is ever just a sales problem. Nothing is just an ops problem,” said Chris DuPaul, distribution group president for Myers Industries.
“Nothing is ever just a sales problem. Nothing is just an ops problem,” said Chris DuPaul, distribution group president for Myers Industries.

On March 18, 2019, Myers Industries Inc. officially committed to restructuring its distribution segment. In an 8K filing with the U.S. Securities and Exchange Commission, Myers said the transformation initiatives “are intended to increase sales force effectiveness, reduce costs, and improve contribution margins.”

More specifically, the company “plans to realign its distribution segment, commercial sales structure and expand the segment’s e-commerce platform.”

Finally, the Distribution Transformation Plan “will include the elimination of certain sales and administrative positions.”

In connection with the plan, Myers estimated it will incur restructuring costs of approximately $900,000, “primarily employee-related costs,” in calendar year 2019, and approximately $1 million of other implementation costs. Myers expects to receive annualized benefits of $5 million to $7 million after calendar year 2019 from the plan.

In an official statement to help explain its intentions following the 8K filing, Myers had this to say:

"As the tire repair and retread industry continues to evolve, Myers Industries is working on transforming its Distribution business. We are refining our strategy to invest more in our growth channels, better serve our customers and create an even brighter future for our people. As part of that strategy, we made the difficult but necessary decision to realign our organization. This decision, along with several other initiatives, is helping Myers Tire Supply evolve while investing in growth channels and optimal paths to market."

As part of the realignment, Myers has reduced its sales territories from 139 to 130. It also is increasing the size of its strategic accounts team.

At the 2019 Myers Tire Supply National Sales Meeting in Cleveland on April 15, Chris DuPaul shed even more light on the initiatives. DuPaul leads the distribution division for Myers in his role as group president. The division is made up of Myers Tire Supply, Myers International and Patch Rubber.

“What we haven’t always done is evolve with the times, evolve with our industry,” he said. To help rectify that, he and the Myers leadership team have been looking at every part of the business, including how Myers goes to market with its more than 14,000 SKUs and the channels through which it sells.

“We took out layers in our field leadership, primarily because I don’t need four layers between me and my customers. It gets us much closer to our customers, it gets us much closer to our sales reps, and allows us to be much more nimble as an organization.”

DuPaul said Myers also has changed how it compensates its remaining sales force.

Myers has started looking differently at its customers and suppliers as well. “There is a big difference between having a vendor and having a partner,” said DuPaul.

“Over the course of the last three to six months, we started to be more selective about… the places (where) we want to play, who (we are) going to do that with, and how… we support each other to grow our business together.”

DuPaul said the company also is investing in a larger national strategic accounts team, digital platforms and inside sales.

Net sales in the distribution segment for its fourth quarter ended Dec. 31, 2018, increased $200,000, or 0.6% compared to the fourth quarter of 2017. DuPaul said that was the segment’s first quarter of growth “in a very long time.”

For the full year, the distribution segment’s net sales declined 4.3% compared to fiscal 2017. Myers said the decrease was primarily due to lower equipment and international sales compared to 2017.

Related Topics: 2019 Myers Tire Supply Dealer Meeting, Chris DuPaul, Myers Industries financials, realignment, shop equipment, tire service equipment, wholesale

Bob Ulrich Editor
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