MILWAUKEE—With the weight of the world on his shoulders, the mythical Atlas never dropped the ball. The same can't be said for the company of the same name that once was the nation's largest TBA distributor, marketing tires, batteries and accessories to oil company stores and service stations.
After less than a year under its new owners, Atlas Supply Co. has gone belly up.
But customers of the historic Atlas brand of products needn't shed many tears: On June 12, Milwaukee-based distributor TeamTBA acquired the trademark, existing inventory and accounts re- ceivable of Atlas. It has vowed to return it ``to the traditional standard of quality that its customers knew and loved for close to 70 years.''
Atlas Supply was established in 1929 by John D. Rockefeller's Standard Oil Co. of New Jersey.
Owned for most of its existence by four oil companies, Atlas Supply was sold on May 14, 1997, by Chevron Corp. and BP America Inc. to Atlas Acquisition Inc., an independent management/ investment group headed by Jim Scott.
The longtime member of the management team at Slick 50' Products Corp. and Quaker State Oil Co. set out to rapidly grow Atlas after what Mr. Scott termed years of stagnation.
That, however, was not to be.
The company shuttered its Atlanta headquarters and ceased operations April 28. According to the attorney handling the dissolution of the corporation, Mr. Scott and all other executives resigned.
Holland O'Neil, with the Dallas law firm Gardere & Wynne, told Tire Business that Atlas Supply's principal secured creditor, Fleet Capital, one of the nation's leading commercial lenders, foreclosed on the company and sold its assets to TeamTBA.
``Basically, Atlas' expenses exceeded revenues.... The shareholders had been making additional contributions, and it just got to the point where it was a sinking ship that couldn't bail enough water,'' Ms. O'Neil said.
It's unlikely Atlas Supply will file for bankruptcy, she added. ``There's really no reason to. There's just lots of unsecured creditors and no equity in any of the assets.''
When it closed, the company was ``multimillions'' in the hole. She said the price of the sale to TeamTBA was less than $5 million—not enough to fully repay Fleet Capital, which was owed ``a little more'' than that. Two other secured creditors ``were left without anything.''
Julie Kowalski, TeamTBA's general manager, said she now needs to ``move forward with building a new (Atlas) business.
``There's still extremely high loyalty for the Atlas brand—much higher than I would have ever anticipated.''
To handle the new Atlas operation, TeamTBA is in the process of filling more than two dozen positions, including field and inside sales, customer service, accounting and collections.
The Atlas private label tire, long a staple at service stations across the country, will continue, though Ms. Kowalski is unsure who the manufacturer will be or what types of tires will be available.
Bridgestone/Firestone Inc.'s Oklahoma City-based Dayton Tire unit had been producing passenger and high performance Atlas tires for several years. Before that, Cooper Tire & Rubber Co. was the manufacturer. Most recently, Atlas Supply also was marketing Dayton brand tires, primarily to Chevron and BP dealers and jobbers and, prior to 1992, also to Amoco and Exxon stations.
TeamTBA is renegotiating with many of the existing Atlas-brand product suppliers, and is close to completing deals with them. ``We'll be making changes to the Atlas program as we move forward,'' Ms. Kowalski said. ``But first I need to listen to customers and find out what their needs are, and then respond accordingly.
``We plan to carry all the high-quality products that Atlas customers knew and loved.''
Those consist of Atlas-branded tires, batteries, filters, chemicals and a ``very, very large'' branded accessory line that includes remanufactured parts, brake pads, spark plugs, wiper blades, antifreeze and other products.
According to a letter sent to ``valued Atlas customers''—who number more than 5,000—TeamTBA President Vic Hunter and Ms. Kowalski assured them: ``Our goal is to take you back to the days you remember—the days when doing business with Atlas meant quality products, nationally accepted warranties, reliable service and fair prices.''
TeamTBA calls itself ``a financially stable company'' that has been in the TBA business for more than 13 years. In 1993, Shell Oil Co. awarded it the exclusive rights to market and sell the Shell-branded TBA line. The company is no stranger to the Atlas brand, however, having run the Amoco/Atlas TBA program from 1985 to 1992.
Through the acquisition, TeamTBA also inherited and is continuing to at least temporarily operate four of Atlas Supply's leased warehouses: one in Atlanta, one in Columbus, Ohio, and two in California. TeamTBA has no warehouses of its own; all products on the Shell side of the business are shipped directly from the manufacturers.
Ms. Kowalski said Atlas products are sold through some 8,000 outlets, while Shell products are retailed through about 2,000, most being gas stations with repair bays. Within a couple of weeks she anticipates the company will have a complete line of Atlas products available.
Although TeamTBA did not purchase Atlas Supply's liabilities, it has stated it will honor and process valid warranty claims because ``we realize that, in order to maintain loyalty to Atlas-brand products, we must stand behind Atlas products now and in the future.''