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June 26, 1995 02:00 AM

M. WARD TO SELL GOODYEARS

Kathy McCarron
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    CHICAGO-About 350 Montgomery Ward & Co. Inc. retail stores will begin offering several lines of Goodyear-brand tires in July under a new distribution agreement forged June 13. The pact continues Goodyear's strategy to open distribution channels outside its traditional network of company stores and independent dealerships. Ward becomes the third mass merchandiser-in addition to Sears, Roebuck & Co. and Wal-Mart Stores Inc.-to carry the Goodyear brand.

    Goodyear's independent dealers, while not pleased with the deal, have become resigned to the fact that Goodyear will continue to court these large competitors.

    ``We've lived through everything else they've done; we'll live through this,'' said John Walls of Olympic Tire & Service Co., Dallas, who added that Sears is a more formidable rival than Ward in his market.

    Goodyear will supply Ward with two exclusive lines-the Goodyear Arriva II with a 60,000-mile treadwear warranty, and the Goodyear Spectra, with a 50,000-mile treadwear warranty-as well as limit ed sizes of Goodyear Eagle GA high performance tires and Wrangler GS-A light truck tires.

    Additional proprietary lines of Goodyear performance and LT tires will join Ward's inventory later this year. Ward also will be able to special-order other Goodyear lines, a Goodyear spokeswoman said.

    The pact ``is part of our strategy to expand distribution to new customers through mass merchandisers while aggressively pursuing growth through independent dealers,'' said Goodyear Chairman Stanley Gault.

    ``Our research affirms that Goodyear tire sales through Montgomery Ward will be supplemental, and the increased exposure of the Goodyear brand to more consumers will raise brand awareness and brand preference, giving a boost to sales through all channels,'' Mr. Gault added.

    A Goodyear spokeswoman added that research indicated Ward customers are very loyal to the retailer. They also are more price-oriented than brand-oriented and may not be willing to go elsewhere to find a Goodyear-brand tire.

    Montgomery Ward-which offers automotive products and services through approximately 350 Auto Express outlets, adjacent to most of its 400 department stores nationwide-has been working on broadening its inventory.

    The Goodyear deal ``fits with our strategy,'' a Ward spokeswoman said. ``We have said we want to be. . . the No. 1 retailer of tires and batteries.''

    During the past several years, Ward has been expanding its offering of major-brand tires, which includes Michelin, Firestone, Bridgestone and General.

    Goodyear dealers are disappointed at the added competition from Ward, but not nearly as angered as they were three years ago when Goodyear broke with its long-standing policy of shunning mass merchandisers and began selling through Sears.

    Dealers contacted by TIRE BUSINESS haven't noticed any benefits from the presumed increase in Goodyear brand recognition the tire maker claimed would be achieved through distribution to mass merchandisers.

    ``The brand recognition (was) already in place, as far as I'm concerned,'' said Tony Heidemann of McCord Tire Service Inc. in Gibson City, Ill. ``The mass merchandisers are just cashing in on it.''

    Mr. Heidemann also thinks Goodyear is merely shifting sales from one channel of distribution to another.

    ``Goodyear wants more distribution, but they only take distribution away from us,'' he said. ``You can only sell so many tires.''

    James Faught of Northwest Tire & Service in Flint, Mich., said the impact of the Ward deal may be offset by Goodyear's new dealer-oriented programs aimed at promoting dealership growth.

    The tire maker's willingness to modify its policies has helped ease the strained relationship with some of its dealers, Mr. Faught said.

    But just as Goodyear is looking to improve its sales and distribution, dealers have to concentrate on advancing their own businesses, he added. ``You've got to do what is right for your business and your market,'' Mr. Faught said.

    Dealers once committed to carrying only Goodyear tires have been stocking rival brands in their effort to stay competitive.

    Though 1994 was his dealership's best sales year with Goodyear tires, Mr. Faught said he's also drummed up additional business by offering other brands, such as General, Uniroyal, Michelin and a private brand line, during the past couple of years.

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