Retail

Icahn Automotive Will Focus on Tire Inventory and Tire Distribution

Joy Kopcha
Posted on May 13, 2019

Icahn Automotive Group LLC has revealed eight priorities for a multi-year transformation plan, and managing the company’s tire inventory is near the top of the list.

Icahn Automotive, a segment of Carl Icahn’s larger Icahn Enterprises L.P., consists of more than 2,000 company-owned and franchise locations and 25 distribution centers throughout the U.S., Canada and Puerto Rico. Among its brands: Pep Boys — Manny, Moe & Jack.

In a recent filing with the U.S. Securities and Exchange Commission, Icahn Automotive provided a glimpse of its plans for the future. The company said acquisitions of recent years (there was a bidding war with Bridgestone for Pep Boys in 2015, and there have been many others since — the company went from 1,000 stores to 1,900 stores in the same year) “provided operating synergies, expanded our market presence, strengthened our parts distribution channel and enhanced our automotive segment’s ability to better service its customers.

“However, our automotive aftermarket parts business is in a highly competitive industry and is smaller than several of its competitors who have greater financial resources and operational capabilities. Our automotive segment continues to evaluate strategic alternatives with respect to the aftermarket parts business.”

Here’s a look at the eight priorities for Icahn Automotive’s “multi-year transformation plan, which includes the integration and restructuring of the operations of its businesses.” (MTD has highlighted tire distribution in the list.)

  • Positioning the service business to take advantage of opportunities in the do-it-for-me market and vehicle fleets;
  • Optimizing the value of the commercial parts distribution business in high volume markets;
  • Improving inventory management across Icahn Automotive's parts and tire distribution network;
  • Optimizing the store and warehouse footprint through openings, closings, consolidations and conversions by market;
  • Digital initiatives including a new e-commerce platform and enhanced e-fulfillment capabilities;
  • Investment in customer experience initiatives such as enhanced customer loyalty programs and selective upgrades in facilities;
  • Investment in employees with focus on training and career development investments; and
  • Business process improvements, including investments in our supply chain and information technology capabilities.

A look at the financial results

Automotive is just a segment of the overall Icahn business. For the first quarter of 2019, ended March 31, 2019, Icahn’s automotive segment recorded net sales of $693 million, up from $686 million the year prior. That $7 million increase is a gain of 1%, and is attributed to an increase in automotive services sales of $11 million, thanks to both consumer and fleet business. The service gains were offset by a $4 million decrease in aftermarket parts sales.

Commercial sales increased $13 million — driven by an increase in Pep Boys’ commercial programs. So far this year it has launched a mobile service for fleets. Pep Boys Fleet will service a fleet customer of any size.

Related Topics: Carl Icahn, commercial tires, Icahn Automotive Group, retail, Tire distribution, Tire Inventory

Joy Kopcha Senior Editor & Digital Projects Editor
Comments ( 1 )
  • Jack

     | about 4 days ago

    This company is in denial about poor performance in both parts and service. Overpriced parts and labor is not only lending to the decline of the company, but pushing "loyal" customers into the open arms of lower priced competitors. The tactic used could possibly include frauding customers by selling parts and services not needed.

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