PHILOMATH, Ore.-A Les Schwab Tire Centers Inc. associate store owner is ending his relationship with the retailer because he said the company nixed his plans to open a second location. Arnold Beggs, owner of the Les Schwab Tire Center in Philomath, will officially break from the nation's third largest independent retail organization June 15.
He has opted, instead, to join the fast-growing Northwest Tire Factory Group L.P., a Portland, Ore.-based buying group.
He will reopen his tire and undercar service outlet as Beggs Tire Factory.
The decision to make the change was not an easy one, Mr. Beggs admitted during an interview, but it was a decision that was best for his 10-year-old business and its employees.
``There was a lack of opportunity'' with the Les Schwab organization,'' he said. ``As people grow and the company matures, there has to be an opportunity for expansion.''
Mr. Beggs said he had notified Les Schwab Tire in December of his desire to open a second store but was told he could not.
Les Schwab Tire President Phil Wick sent a letter to the outlet owner stating no associate dealers would be allowed to expand and that all company expansion ``from this point on'' would be carried out by company-owned stores, said Mr. Beggs, who began his career with Les Schwab Tire as a company employee 24 years ago.
Chairman Les Schwab said his company simply is not ``pushing'' its associate dealer program-opting, instead, to open company-owned stores. He confirmed that the company denied Mr. Beggs permission to open a second Les Schwab Tire outlet.
``We've had a little more luck with company-owned stores, but we're not completely closing the door on our'' associate stores, Mr. Schwab said, adding that new stores are considered on an individual basis.
Les Schwab Tire owns 171 company-owned outlets and 80 associate stores, according to Mr. Schwab.
Currently, the Northwest Tire Factory Group has 55 limited partners representing nearly $40 million in tire outlet sales, according to group co-founder Al Taylor, who said he expects membership to reach 100 within three to five years.
Mr. Beggs said he was attracted to the purchasing power of the Tire Factory organization, which is able to buy tires at prices comparable to those he had been getting as a Les Schwab dealer.
Once away from the Les Schwab organization, Mr. Beggs said he intends to open a second location in a former automotive parts store in Albany, Ore. Beggs Tire Factory is installing five tire-service-only bays at that outlet, expected to open July 1.
Although the Philomath location performs undercar service, Mr. Beggs said he intends, at least in the immediate future, to perform only tire sales and tire-, wheel- and battery-related service in the new location, citing Goodyear's recent push to its tires-only Just Tires concept stores as the ``way to go'' in the retail tire market.
Beggs Tire Factory could expand into additional markets in the Oregon area following the opening of the new location, depending on that store's success, according to Mr. Beggs.
``We don't have visions of grandeur,'' he said. ``Good, steady growth is what we are after.''
Among his other future plans, Mr. Beggs said he intends to soon make his business employee owned.