Who will be the first ``millennium'' tire dealer? Add Tom Gegax's name to the short list of independent tire dealers aspiring to expand their empires to 1,000 outlets. Morgan Tire & Auto Inc. Chairman Larry C. Morgan was the first independent dealer to declare his intent to build his company to 1,000 stores. By adding an average of 50 stores a year, Morgan Tire would approach the thousand-store mark by 2012.
While no others have committed themselves to the millennium goal, a handful of competitors already is positioned to be in consideration: Penske Auto Centers stands at 660 stores after its retrenching this year; Big O Tires is closing in on 500 stores and has 45 more territories identified for expansion; Discount Tire Co. has passed the 400 mark and has plans for 25 more outlets this coming year.
With 144 stores—85 wholly owned and 59 franchised—and $133 million in sales currently, Mr. Gegax foresees doubling Team Tires Plus Ltd.'s business in the next three years and hitting 1,100 stores nationwide by 2010, an average of 86 new stores a year.
How does he plan to do it?
Largely by sticking to the principles and values already laid out in the Tires Plus program, Mr. Gegax said, plus some timely, targeted acquisitions along the way.
``A thousand stores is part of our vision statement,'' he said. ``To get from 145 stores now to 1,000 in 10 years will require a dynamic, flexible plan.
``How will our company look in 2010? There are too many variables now to be too specific,'' Mr. Gegax said. ``We're heading into uncharted waters when it comes to nationwide distribution. We'll continue to have a mix of company-owned and franchised stores, and e-commerce will play a role as well.''
Morgan Tire, with its acquisition of Michel Tire, Avellino's, Wheel Works and American Discount Tire, was by far the growth champion of the past year, moving from 181 stores to 330 and nearly doubling sales last year to $297 million, with 44-percent growth projected this year, to $429 million.
Most recently, Morgan bought the eight-store American Discount Tire of Athens, Ga., as part of a move to build the Olson Tire network in Georgia to 40 stores.
Along with adding 50 stores a year, Morgan Tire forecasts 28-percent annual sales growth for the next five years, putting it past the $1 billion mark by 2004.
Other rapid risers of the past year include:
Discount Tire, which added 20 stores last year—including its first on the East Coast outside Florida, in North Carolina—and expects to add 25 in the coming year. Sales this year are projected to rise 15.3 percent to $1.15 billion.
Les Schwab, up 17 company-owned stores over 1998, with retail sales rising 14 percent to $671 million;
Mountain View Tire, up 16 stores over 1998, primarily due to its acquisition of Superior Tire in Nevada;
Conrad's Tire Service, which took over nine Cleveland-area Goodyear Tire & Auto Service centers in May; and
Wholesale Tire Co., which grew by 10, including seven Tire Warehouse Inc. stores it acquired recently in upstate New York.
Familiar names from past rankings not on the 1999 list include: Tire Centers Inc. (115 stores), acquired by Michelin North America Inc.; and Michel Tire Co. (58 stores), Avellino's Tire & Auto Service Centers (22 stores), and Wheel Works (23 stores), all now part of Morgan Tire.
Among the newcomers are: Zurcher Group, with 170 affiliated dealers throughout the Midwest; Tire Factory Groupe LLC, with 171 affiliated Tire Factory outlets in the West; VIP Discount Auto Centers, with 47 stores in New England; and Scher Tire Inc., with 29 stores in California.
All told, Tire Business now has identified more than 100 dealerships throughout the U.S. and Canada that operate 10 or more stores, and the list keeps growing.
The 75 dealerships profiled this year operate nearly 5,850 retail outlets—including franchise and associate locations—a net gain of 385 from a year ago. Factoring out a net loss of 130 stores by Penske, this group actually added 515 new stores.
These same 75 dealerships account for more than $7 billion in revenue from the sale of tires, wheels, parts and automotive service, according to Tire Business' research.
In terms of supply relationships, 12 dealerships on this year's rankings—with 1,150 stores and about $1 billion in combined sales—are part of the Tire Alliance Groupe, while seven dealerships with 338 outlets are allied with American Car Care Centers Inc.
As for tire manufacturer links, 19 dealerships with 1,366 outlets identify themselves with Goodyear, whereas only five of the ranked dealerships linked themselves with Bridgestone/Firestone Inc., and four with Michelin Americas Small Tires.
On the other hand, Michelin was listed by 50 of the 75 dealerships outlined in this report as one of their brands, making it the most prevalent brand identifed. Goodyear was listed by 42 dealerships, followed by Firestone and BFGoodrich with 37 each, Bridgestone and General with 32 each, Uniroyal with 28, Pirelli with 25, Kelly-Springfield with 23 and Continental with 21.
Most of the leading North American tire dealerships profiled in this issue don't plan to stand pat on their past success. The following is a sampling of expansion plans disclosed by several dealers.
Autotire Car Care Centers, after adding one store last year, has plans for five new outlets next year in the St. Louis metro area.
Ben Tire Distributors Ltd., in Toledo, Ill., added four stores by acquistion, and joined the Goodyear G-110 dealership program for 15 of its 29 stores throughout Indiana and Illinois. The G-110 connection came via Buck Miller Tire in Heron, Ill., which Ben Tire bought in late 1998.
Ben Tire, whose retail stores do business as Neal Tire & Auto Service, anticipates growing by about three more stores in 2000.
Flamborough, Ontario's Beverly Group Inc. expanded its network of stores recently to 23 with the acquisition of MacKenzie Tire of Hamilton, Ontario, and the opening of a new location in Barrie, Ontario.
Two of MacKenzie's three locations are retail stores, bringing Beverly's retail network to 21, the company said. Beverly Tire, 49-percent owned by Goodyear Canada Inc., plans to continue to grow via acquisition and new openings, President Bill Farmer said.
Dunlap & Kyle Co. Inc., after opening only one new store in the past year, has four under construction in Tennessee due for completion by March or April next year, and is negotiating to buy two other properties.
The company's 38 retail stores, which operate primarily as Gateway Tire or Hesselbein Tire, should produce $65 million in sales this year, an 11-percent jump over 1998, the company reported.
Everybody's Oil Corp. of Anderson, Ind., is looking to add three new outlets to its network of 37 Tire Barn Warehouse and three Quick Tire stores. The company added three Tire Barn stores and one Quick Tire in the past year.
Fletcher's Tire & Auto Service of Phoenix plans to increase its store network by three to 39 by January 2000, in the Phoenix and Tucson, Ariz., metro areas.
Mavis Discount Tires of Mount Kisco, N.Y., expanded its chain of stores in the metro New York City area by five to 32, and company owners Steven and David Sorbaro are pondering further expansion this coming year, as opportunities arise.
Merchant's Tire & Auto Centers, with 116 retail stores now throughout the Washington metro area and Mid-Atlantic states, has three new stores scheduled to open before year-end and 30 openings planned for 2000. The openings next year represent the start of the company's plan to double in size by 2004.
Cleveland's Mueller Tire & Brake is eyeing Columbus, Ohio, as a second area of operations to complement its 15 stores in northern Ohio. Mueller Tire, an 81-year-old family-owned dealership, has no sites picked out yet in the central Ohio area, but recently advertised for regional and store managers to help it prepare for expansion.
Mueller, which added two stores this year in northern Ohio, has definite plans for two more stores in the area next year, said Scott Mueller, one of the dealership's three principals.
Plaza Tire Service of Cape Girardeau, Mo., is planning 10 new stores next next year in its existing marketing region in and around Missouri. The additions would extend Plaza's network to 46 stores.
Somerset Tire Service Inc. of Bound Brook, N.J., added eight stores in the past year, and plans 10 to 15 new outlets next year on its way to 100 stores throughout the northeast by 2001. The company operates as STS Tire & Auto in Massachusetts, New Jersey, New York and Pennsylvania.
Tire Town Stores of New Orleans added three stores in south Louisiana, bringing the chain to 19, and is evaluating additional stores in south Mississippi and south Louisiana in the coming year.
Tire Warehouse Central Inc. of Keene, N.H., plans to continue its steady growth strategy, adding five to seven stores throughout New England in the coming year. The dealership operates 51 stores in Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.
Of these, 29 are company owned and 22 franchised.
Vespia Tire Centers Inc. of South River, N.J., opened four stores in the past year, while closing two, leaving the chain at 25 locations—19 company-owned and six franchised. Vespia plans to add three to four stores a year for the next few years, President Phil Vespia said.
Jack Williams Tire Co. Inc. of Scranton, Pa., added two stores last year in eastern Pennsylvania, and plans three more, growing to 20 retail outlets and three commercial sites.