HOFFMAN ESTATES, Ill.-Come see the tire side of Sears. It's now bigger than ever.
Already the reigning 10-ton gorilla when it comes to selling tires, batteries and related automotive services, the retailing giant realigned its automotive group on Dec. 11 in order to continue growing. The result could produce an even tougher competitor.
The move creating two divisions-tires and auto parts-restructures the company's Western Auto Supply Co. subsidiary and its Tire America and National Tire Warehouse (NTW) units. Hoffman Estates-based Sears, Roebuck and Co. said the move was designed ``to rapidly expand its growth and leadership position'' in the tire, battery and parts segments.
Sears' new 1,042-store tire division comprises Sears Auto Centers and NTW and Tire America outlets, while the auto parts division encompasses 1,480 Western Auto and Parts America stores.
The strategy is targeted at increasing shareholder value, Sears said, while growing its core business. And, according to Sears spokesman Bob McHenry, ``things will definitely operate differently.''
Sears still will maintain the store names and formats as they currently exist, but by mid-1996 Tire America will abandon its Wheeling, W.Va., headquarters, and NTW will close its home office in Woodbridge, Va. Both operations-which basically offer the same products and services as Sears Auto Centers-will relocate sales and administrative operations to the new tire division home office in Hoffman Estates.
Western Auto will remain based in Kansas City, Mo., along with the new auto parts division.
Paul Baffico, Sears' current Automotive Group president, also will head the tire division; John Leach, Western Auto's chairman and CEO, additionally will lead the auto parts division.
Sears Chairman and CEO Arthur C. Martinez said the realignment ``is designed to extend Sears' leadership in the automotive aftermarket by providing synergies in purchasing, distribution, marketing and sales, while maintaining the distinct customer focus of each format.''
The company's ``single-minded objective,'' explained Mr. Baffico, ``is to create the best auto parts business as well as the best tire and battery business'' in the U.S.
Efficiency will be one obvious benefit of the realignment.
Mr. McHenry said Sears will have only one tire buyer for the tire division, which will now buy advertising as one unit rather than each subsidiary separately.
The company still is evaluating the best way to handle tire distribution centers since each format operates its own warehouses. Sears might close some, but Mr. McHenry said ``we plan to grow the business, so overall we may need more centers.
``If we've got two now where we need only one, maybe those resources would be better utilized where we need a new distribution center.''
Sears also has streamlined the pecking order in its auto centers.
``One thing that always hampered the centers in the past was the fact the service center manager reported to the store manager,'' Mr. McHenry said, ``which we believed made sense at the time because automotive was a department of the store.
``But that left our automotive district manager as more of a mentor. . . so he couldn't make (things) happen.''
Auto center managers now will report directly to district automotive managers, ``which will give Mr. Baffico and his team more control over what happens in the centers.''
Rather than serve multiple bosses, Mr. McHenry said, service center managers will now know ``who their master is.''
Because of their freestanding format, NTW and Tire America have always operated more autonomously with ``unit managers,'' but will now come under a district manager's umbrella.
Sears will not change the inside or outside of any stores, but hopes to take ``the best of the best'' from all its automotive operations, he said. For example, Sears Auto Centers ``clearly have the best point-of-sale informational terminals,'' referred to as AMS, for Automotive Management System. Customers' Vehicle Identification Numbers (VINs) are kept in the AMS data base along with their vehicle maintenance records.
That technology will be carried over to the other formats.
On the other hand, Mr. McHenry said, NTW's ``customer interaction and satisfaction level'' has regularly earned high marks within the industry, ``so we're looking at how their procedures differ from everyone else's'' in order to adapt them to Sears' other automotive operations.
At the service counter, customers will see changes through ``better service, better pricing and better selection-and that's all they really want,'' he said.
Sears' fledgling auto parts business, operating under its Parts America banner, has grown practically overnight.
It had 18 stores, mostly in New England, until last Oct. 5, when the company purchased 84 Nationwise Auto Parts stores in Ohio, Indiana, Kentucky, West Virginia and Tennessee.
Then on Oct. 23, Western Auto agreed to pay $37 million for the assets of Wheels Discount Auto Supply Inc., a division of Fays Inc., with an 82-store chain in Pennsylvania and New York.
Sears intends to grow the parts business even further, Mr. McHenry promised.
Nor is Sears averse to expanding its tire and auto service business.
Last May the company signed a deal with Houston-based Pennzoil Co. to offer its Jiffy Lube quick-oil-change services to as many as 456 Sears automotive centers over the next three years.
Taking the tire operation out of Western Auto will allow it to concentrate on growing the auto parts business, Mr. McHenry said, while Sears will continue to analyze other possible acquisitions for its automotive business.