EDMONTON, Alberta—Fountain Tire Corp., based in Edmonton, has expanded its reach into Saskatchewan for the first time—acquiring a 50-percent interest in a two-location dealership in that province—and is evaluating expansion further east into Manitoba. The recently signed ``partnership'' agreement with Nor-Sask Tire Ltd. adds stores in Saskatoon and Regina, Saskatchewan, to the Fountain Tire fold.
Misskey Tire in Melfort, Saskatchewan, also has joined Fountain Tire as an associate dealership, said Fountain Tire President Brian Hesje. Rob Misskey, the third-generation owner and operator, will participate in Fountain Tire's programs.
``It's our intent to expand the number of locations in Saskatchewan,'' Mr. Hesje said. Fountain Tire also is looking to expand further east into Manitoba, he said, but there are no definite plans for a certain number of dealerships in either province.
Mr. Hesje said Fountain Tire will continue its program of equally shared ownership of its locations with the managers.
Fountain Tire now has 122 locations—19 company-owned, 25 associate and 78 partnership outlets—in three provinces (Alberta, British Columbia and Saskatchewan). The number of partnership dealers grew by 20 in the past year, while the wholly company-owned stores dropped to 19 from 30.
``The managers are our partners; that's the ideal relationship for us,'' Mr. Hesje said. Nor-Sask President Keith Lee will continue to manage the Saskatoon operation, and Bill Harnett will remain as manager of the Regina location.
Nor-Sask began operation in 1981 in Saskatoon and opened the Regina location in 1992.
Chad Smereka, promotions manager at Fountain Tire, said the Nor-Sask dealerships are `` two big players in commercial tires in the two biggest cities in Saskatchewan.''
Mr. Hesje would not reveal the cost of the Nor-Sask acquisition, but he said the two Nor-Sask dealerships will add about $6.8 million to Fountain Tire's projected 1999 sales of about $130 million (all amounts in U.S. dollars).
Mr. Hesje said the 19 company-owned locations—either recently acquired dealerships or stores with new managers—will remain company-owned until someone is available to purchase a 50-percent interest and enter into a partnership arrangement.
Mr. Hesje said the relationship between Goodyear Canada—which owns 49 percent of the company—and Fountain Tire ``works best if they assume the role of manufacturer and we assume the role of retailer.''
``They are a resource to us and a very good partner,'' he said.