KERHONKSON, N.Y.-Somerset Tire Service Inc., one of North America's largest retail dealerships, recently purchased the wholesale and retail operations of Kerhonkson Tire Service Inc. for an undisclosed amount. And the Nov. 1 sale, according to the principals involved, was as mutually beneficial as they come.
The deal stands to push STS's combined sales to more than $100 million next year, gives the company 55 retail outlets in New York, New Jersey and Pennsylvania, and provides a springboard for further expansion into southern New York and northern New Jersey, according to President James E. Hannon.
On the other side of the coin, former Kerhonkson Tire co-owner Jay Feinberg now has the opportunity to realize a dream of his own.
``This wasn't adversarial at all,'' Mr. Feinberg said, noting he and Mr. Hannon have known each other for 15 years. Now, as part of a larger organization, Kerhonkson Tire can grow at a rate it could not have on its own, he said.
``The biggest problem with expansion is the high financial barriers in opening new stores,'' Mr. Feinberg lamented. He had wanted to expand the retail portion of Kerhonkson Tire since he joined his late father's firm in 1973.
The four former Kerhonkson Tire retail outlets, operating under the Tire House name in Kerhonkson, Kingston, Newburgh and Poughkeepsie, N.Y., are now under a new STS Tire House banner. This is different from STS's 51 other locations, which are known as STS Car Service Centers. Kerhonkson Tire's wholesale operation has taken the STS Banner Tire System name and gives the Bound Brook, N.J.-based firm its seventh warehouse.
The Tire House name ``is well known in that market,'' Mr. Hannon said. ``Certainly, we want to capitalize on that.''
The four new outlets represent STS's first foothold in the Hudson Valley area, Mr. Hannon said.
Mr. Hannon described Kerhonkson Tire as a ``strong operation...with a very fine reputation and some very good people.'' Among those people are the Feinberg brothers. Jay Feinberg will remain with STS as a consultant, helping the organization plan its retail expansion, while his brothers, Steve and Burt, will retain operations positions, he said.
The three of them had been principals in Kerhonkson Tire, founded in 1960 by their late father, Henry Feinberg.
The sale also gives Kerhonkson employees ownership in the company under STS's Employee Stock Ownership Program, a benefit Mr. Feinberg said he would not have been able to offer his employees.
``There is a lot more opportunity with STS than a smaller, family-owned business,'' he said.
STS intends to grow its retail business in the Hudson Valley area, according to Mr. Hannon.
``We're definitely confident about the market prospects and opportunity in that market,'' he said.