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October 25, 1999 02:00 AM

TOP-NOTCH SERVICE BUILDS CUSTOMER TRUST: TWO SMALLER DEALERSHIPS POST SALES OVER $3 MILLION PER OUTLET

Vera Fedchenko
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    AKRON—In its rankings of the largest North American tire retailers, Tire Business has found that most dealerships average roughly $1.2 million in sales per outlet. But a few exceptions to the rule have surfaced, particularly among two dealerships too small to make Tire Business' Top 75 list. Carlsbad, N.M.-based Forrest Tire Co. and Honolulu-based Lex Brodie's Tire Co., with eight and five stores, respectively, averaged more than $3 million in sales per outlet in 1998.

    So how have these two businesses produced a sales volume per store that rivals industry heavyweights Les Schwab Tire Centers Inc. and Discount Tire Co.?

    It's a matter of trust, according to Richard Forrest, president of Forrest Tire. ``You could go to any of our communities and ask for Forrest Tire and they know who we are. That's a compliment,'' he said.

    John Mayo, CEO of Lex Brodie's Tire, echoed that sentiment. When Mr. Mayo purchased his dealership from founder Lex Brodie 10 years ago, the company had topped a consumer poll done by the Bank of Hawaii as the business that performs the best service in the state.

    Mr. Brodie's name also was well recognized by Hawaiians because of his involvement in public life and commitment to customer service.

    ``This was all before I bought it, so it's a little bit like following (former Green Bay Packers coach) Vince Lombardi. It's a pretty tough legacy to try to maintain,'' Mr. Mayo said.

    Today, Lex Brodie's still is a service-driven business, he said. Salespeople hustle outside to greet customers at their cars and, like Forrest Tire, the dealership offers pick-up and drop-off service to customers.

    The dealership reported 1998 sales of $17 million. Its sales per outlet averaged about $3.4 million, with sales divided evenly among tires, automotive service and gasoline.

    The company offers gasoline at two of its five stores now, but this will be expanded to all five outlets next year, Mr. Brodie said.

    The dealership also keeps a 60-day supply of tires at all of its five locations.

    However, Mr. Mayo acknowledged the dealership has to produce a high sales volume to keep up with rents in Hawaii that can reach as much as $30,000-per-month. An anti-business climate created by Hawaiian government officials also has forced some tire competitors out of business, he said.

    Despite those negative factors, Mr. Mayo plans to open two more outlets on the island of Oahu in 2000. He said that with a population of 1 million, the island has room for more tire stores.

    In southern New Mexico and western Texas, Forrest Tire operates eight stores in markets with populations of 40,000 to 60,000, Mr. Forrest said. El Paso, Texas, is the largest city the company serves.

    Despite its small market area, Forrest Tire posted $25.5 million in revenues for 1998 and averaged $3.2 million per outlet. Retail activities represent 95 percent of sales, and 93 percent of retail sales are derived from tires, the company reported.

    In addition, all the stores perform 24-hour emergency roadside assistance to trucking fleets, although the commercial business is only 5 percent of total sales.

    The company, founded by Mr. Forrest's grandfather in 1944, has discovered that a longstanding reputation for service translates into higher sales volumes. The dealership makes a point of hustling to customers to see what they need, greeting them with friendliness and providing rides to work or home as needed, Mr. Forrest said.

    ``It seems like everything nowadays has gone to self-serve,'' he said. ``You can't even call a business anymore without getting an answering machine. Personalized service, I think, is a thing of the past.''

    Competition from mass merchandisers and fill-rate problems affect Forrest Tire, but the company keeps a large inventory of all major brands at all times to keep its customers satisfied.

    Mr. Forrest operates the business with brothers Mike and Bobby, all of whom actively participate in their local communities through church and local school boards. That public visibility has helped Forrest Tire become known and respected, he said.

    Forrest Tire also has been rated as the best area tire retailer in several local newspaper polls, Mr. Forrest said.

    ``That says a lot when the community says the best place to buy tires is Forrest Tire.''

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