LAVAL, Quebec—When it came right down to it, Antoine Picard went where the money is. Describing the only 1999 acquisition for his company, the president of A. Picard & Sons Inc. said he decided to buy the single-outlet Pneus Legault dealership in St-Jovite—about 65 miles northwest of Montreal—``because it has the most beautiful retail store in all of the Quebec Province.'' It's also the largest tire distributor in the Laurentian region of Quebec.
``That's a rich area—the place where the money is. And that's the most important thing, eh?'' he added, chuckling.
In late September, Mr. Picard's dealership, which operates as President Tire Canada, bought Pneus Legault. The newly acquired dealership splits its business 50-50 between commercial and retail, and has average annual sales in excess of $4 million (U.S.). The firm's eight-bay, approximately 20,000-sq.-ft. facility sells tires, does mechanical work, and runs three service trucks that cater to area fleets and contractors.
``We bought the company because we wanted to cover that part of the province,'' Mr. Picard explained. ``We had a little coverage there, but not a good representation.''
After growing by more than 20 locations in the past year, President Tire is planning to add, in the coming year, about 20 franchise and company-owned outlets to its current roster of 128 stores.
Overall, Laval-based President Tire projects an 18.4-percent increase in total sales for 1999—to about $31 million (U.S.)—and is looking forward to even more expansion next year.
It recently bought two stores in Montreal City that were formerly owned by a tire maker, Mr. Picard said. They are being remodeled and will reopen next spring.
Denis Monette, President Tire's sales manager, said the dealership has been ``very aggressive in the Maritimes''—especially the provinces of New Brunswick and Nova Scotia.
The addition of a 12,000-sq.-ft. warehouse in Nova Scotia has helped President Tire develop more business there, he said.
The company is also making good inroads into Ontario, Canada's most populous province where, he said, the firm's program ``is very aggressive, very to-the-point,'' resulting in the addition of six franchises in the last two months.
As for the promised 20 new outlets, Mr. Monette wouldn't provide specific locations, but said most will be in eastern Canada. President Tire has a facility in Vancouver, British Columbia, on Canada's west coast, but he said that doing business across Canada's four time zones can make it ``difficult to operate.''
He also said President Tire is looking to establish more company-owned stores in areas where suitable franchise operators can't be found.
In Canada, Mr. Monette added, each of the big three tire manufacturers—Goodyear, Michelin North America and Bridgestone/Firestone Inc.—are aggressively trying to get dealers to sell only their products, to the exclusion of the other two.
``Right now, here in Canada, nobody can have access to Bridgestone and Michelin at the same time,'' he said.
``We're starting to feel the pressure now. (Those three tire makers) want us to concentrate much more on their company rather than have access to anyone else.''
President Tire and its dealers are also feeling a lot of pressure from mass merchandisers, such as Canadian Tire Corp. and Wal-Mart Stores Inc.—not only for tire sales, but also for quality employees. ``It's very difficult to match what they're doing'' in terms of extended hours and compensation, Mr. Monette said.
President Tire and its dealers sell BFGoodrich, Continental, Dayton, Kumho, Michelin, Pirelli and Yokohama brand tires, in addition to the firm's own President private label, which Mr. Picard said accounts for 55 to 60 percent of its tire sales.