MEMPHIS, Tenn.—With some help from TBC Corp., Mountain View Tire and Service Inc. (MVT) of Rancho Cucamonga, Calif., has expanded into Las Vegas with the purchase of most of Superior Tire Inc. MVT, which has 18 retail outlets in Southern California, is acquiring 13 of Superior's 15 stores as well as a warehouse, and will continue to operate them under the Superior Tire name.
The two remaining Superior locations will be sold to Big O Tires Inc. franchisees Wes and Jeff Stephenson, TBC said. The Stephensons will convert those locations to the Big O format, giving the brothers a total of 10 Big O locations in the Las Vegas market.
Terms of the deal were not disclosed, but MVT President Nick Mitsos said Superior's annual sales are in the $15 million to $20 million range. MVT projects sales of about $21 million for 1998, so this purchase will come close to doubling the size of the company.
TBC will have an undisclosed equity stake in the purchase, which was finalized on Nov. 11, but Louis DiPasqua, TBC vice chairman and CEO, said MVT will have ``total management control'' of the Superior stores. ``We're not retailers,'' he said of TBC.
This new partnership with TBC will allow MVT to pursue its own aggressive growth plans. Mr. Mitsos said MVT is two years into a five-year plan to grow to between 50 and 60 stores. The acquisition of Superior will give MVT 31 locations. ``We're more than 50 percent there,'' said Mr. Mitsos.
For TBC, the deal with MVT continues an aggressive policy of acquisitions and partnerships to firm up its position in the replacement tire business.
In March, Mr. DiPasqua told Tire Business the Memphis, Tenn.-based company would partner with distributors that had financial security, a commitment to retail and management talent.
In July, TBC announced that it was acquiring Carroll's Inc., an Atlanta-based distributor that serves more than 5,000 dealers in the Southeast. And, growth in TBC's Big O franchise operation will continue at the rate of 25 to 35 new dealerships per year according to Mr. DiPasqua. The current roster of Big O dealers stands at about 420.
Mr. Mitsos said he has known some of TBC's management for several years. He said that when owner Marlo Reamer put Superior on the market so he could retire, ``TBC reached out and said, `Would you like to partner with us?' And I said that we would be happy to.''
Of rapidly growing Las Vegas, Mr. Mitsos said, ``I think it's a unique market all to itself.'' Superior has been in business 50 years and he said, ``I felt it to be important to keep that name.'' Mr. DiPasqua agreed and noted that Superior would continue to be an important outlet for TBC's Cordovan brand of tires.
On its World Wide Web home page (www.MountainViewTire.com) MVT bills itself as ``the largest family-owned, authorized Goodyear tire dealer in the West.'' Mr. Mitsos moved to California in 1982 to work for Goodyear and he opened the first MVT location in 1987.
MVT existing California locations are Goodyear G110 outlets, and Goodyear products account for more than 98 percent of the company's $6.75 million in tire sales. Nearly two-thirds of MVT's sales are derived from auto service, including full underhood service, and a road-hazard program.
Mr. Mitsos isn't overly concerned about the tire maker's reaction to other brands becoming a major source of sales.
``They (Goodyear) understand that there are certain market conditions that are going to require things like that.'' Mr. Mitsos added that MVT has a plan and a strategy to increase Goodyear sales along with growth in other areas.
MVT's president said that in addition to Superior's 13 retail outlets, MVT also will take over a warehouse with a capacity of 15,000 units operated by about 10 employees. Mr. Mitsos said he believes the Las Vegas market has significant wholesale potential and he hopes to increase Superior's wholesale business fivefold.