RESTON, Va.—Merchant's Inc., which wants to double its size within four years, is targeting the Charlotte, N.C., area for immediate expansion. Merchant's plans nine new retail stores for Charlotte—the first of which will open this year, said James Matthews, now president of the company's wholesale-commercial operations following a recent management reorganization.
The restructuring, undertaken in light of the company's ambitious growth plans, also placed Carl Finamore, a former Western Auto and Parts America executive, as president of Merchant's retail operations. Both men report to Merchant's CEO J. Michael Riggan, a former vice president of Pep Boys—Manny, Moe & Jack Inc., hired in September, to oversee the expansion.
The Manassas, Va.-based company operates retail stores in five Mid-Atlantic states and the District of Columbia. It recently opened its 135th outlet, in Christiansburg, Va. Merchant's wants to grow to 300 retail stores and double its annual retail sales to $600 million by 2003, said Mr. Matthews, who hosted the annual dealer gathering Feb. 19-20 of American Tire Distributors, the company's wholesale unit, in Reston, Va.
The 56-year-old dealership currently operates retail tire and auto service outlets in 14 North Carolina localities, but not in the Charlotte area.
Merchant's plans to open a total of about 20 retail stores in 1999 and from 30 to 40 stores annually thereafter, Mr. Matthews told Tire Business.
``All of this will be contiguous growth,'' he said. Unlike some of its competitors, such as Clearwater, Fla.-based Morgan Tire & Auto Inc., Merchant's has no plans to extend its retail network nationwide.
``We want to position ourselves to give the best return to our shareholders,'' he said. ``And if we can do it as a regional player, that's what we want to do.''
Mr. Matthews said the company's wholesale and commercial tire operations also are expanding, as witnessed by its recent acquisitions of Buffalo, N.Y.-based Interstate Tire Co. and Crown Tire in Auburn, N.Y., near Syracuse. Merchant's will continue looking for potential acquisitions that ``will add value to our wholesale division,'' he added.
At present, American Tire Distributors wholesales tires and some auto parts to about 5,000 outlets—none of which are owned by Merchant's—in parts of at least a dozen states and the District of Columbia. Annual sales are approximately $105 million. Working out of 11 warehouses, the wholesale unit runs route trucks that provide deliveries at least weekly and as many as four times daily in some metropolitan areas.
The family-owned firm employs more than 1,800 people. Some 250 work in the company's wholesale and commercial operations, which includes two Bandag retread shops and five commercial truck tire centers.
Merchant's has agreed to provide tire inspection and maintenance services to Roadway Express Inc. under a new contract between Bandag Inc. and the trucking company.
Under the terms of that agreement, announced in February, Tire Management Solutions Inc., a newly formed Bandag subsidiary, assumed total responsibility for supplying and maintaining both new and retreaded tires for Roadway's 10,000 tractors and 35,000 trailers.
Merchant's will conduct tire inspection and maintenance at two of the trucking firm's terminals in Maryland and one in Virginia, he said, as part of a nationwide network of 70 Bandag dealers lined up by TMS to provide such service to Roadway.