LAS VEGAS—You can hardly accuse Heafner Tire Group Inc. of letting the grass grow beneath its feet. On Nov. 4—the eve of the International Tire Expo/Specialty Equipment Market Association Show's close in Las Vegas—the Charlotte, N.C.-based firm unveiled a flurry of activities it hoped will ensure its position as the largest independent marketer of tires in the U.S. They included:
The recent acquisition of 17 stores from a California tire dealership to boost its Winston Tire operation;
Management reassignments aimed at strengthening and guiding its burgeoning divisions;
A new distribution facility to fuel expansion in Southern California; and
The creation of a unit to support its dealer ordering network, Internet and e-commerce efforts.
Heafner's Winston Tire Auto Service and Repair, based in Burbank, Calif., increased its store count with the Oct. 28 acquisition of 17 outlets from Dorman's Tire Inc., a Goodyear-affiliated retail chain operating as Tri-Valley Tire in San Diego and in Orange County, Calif.
That move, said Doug Roberts, Winston Tire president and COO, will help the dealership—which Heafner acquired in the spring of 1997—expand into "vibrant neighborhoods and upscale shopping centers," as well as reposition itself as a leader in the growing Southern California market.
All told, Winston will have 213 stores in California and Arizona once it revamps Tri-Valley—expected to take up to six months—and closes seven Winston outlets he described as "tired, older locations in neighborhoods that aren't as vibrant as they once were."
The company also has about 40 other Winston stores—generally between 25 and 30 years old—that are in declining neighborhoods.
In the next year and a half, those will either be closed or relocated, Mr. Roberts said, while Heafner embarks on an aggressive strategy to remodel and update other tired-out stores in good locations.
Heafner, which expects its revenues to top $1 billion by year-end, has budgeted to open 15 new retail stores next year. Though it likely will remain quiet on the acquisition front for the remainder of 1999, the company doesn't plan to rest for very long.
Donald C. Roof, Heafner Tire Group president and CEO, acknowledged Heafner's next target market—and a "high priority"—will be the vast expanses of Texas, where a strategic acquisition, perhaps by early next year, could help provide Heafner with a southern link to its coast-to-coast distribution network.
Heafner believes the industry "is ready for a national distribution company that can deliver consistent products and services to independent tire retailers in this country," noted Daniel K. Brown, senior vice president, sales and marketing.
But "to truly be a national distributor," Mr. Roof added, the company must solidify its presence in California and enter Texas.
In reference to the acquisition earlier this year of the majority of Heafner's equity interests by Charlesbank Capital Partners LLC, Mr. Roof said the tire distributor "lost a half-year in the acquisition mode" while it brought the new owner on board.
And Charlesbank, he pointed out, "did not invest in Heafner to not see it grow...."
To manage the company's continually expanding network of operations, Heafner announced the appointments of Michael C. Largent as vice president-business development; Raymond C. Barney as president of Heafner's Competition Parts Warehouse (CPW) Division; and Theodore D. Bennett as president of the firm's California Tire Division. The last two businesses were acquired by Heafner over the last two years.
Mr. Largent, 51, previously was president of California Tire, which he joined in 1990. Before that, he worked for both Dunlop Tire Corp. and Continental General Tire Inc. His new duties include development of business acquisitions.
Following more than 14 years with B.F. Goodrich, Mr. Barney, 44, joined CPW in 1991 as executive vice president and COO, and was integral in getting the California-based automotive parts and wholesale distributor into the tire business.
Mr. Bennett, 52, joined California Tire in 1995 as vice president-operations, then became executive vice president. Much of his 25 years in the industry were spent with Firestone Tire & Rubber Co.
Meanwhile, Heafner's California Tire subsidiary, acquired last January, will open a 100,000-sq.-ft. distribution facility in Carson, Calif., by next March 1—a move Mr. Largent said will bring its "brand of customer commitment, sales and service to independent tire dealers in Southern California, the largest volume tire market in the world."
With warehouses in its hometown of Hayward, Calif., and in Sacramento and Fresno, California Tire currently supplies some 1,500 dealers in a distribution area covering 75 percent of the state as well as parts of southern Oregon and northwestern Nevada. The new facility will push Heafner's distribution center total to over 60.
As a wholesaler, Mr. Bennett said, the unit is dedicated to providing independent dealers "with all the benefits of having a direct relationship with the manufacturers, without any of the constraints."
Heafner also has launched a new support group, Heafner Interactive, to link its vast distribution network to its growing online efforts. It will coordinate the firm's evolution as a one-stop shopping mart as well as future electronic commerce ventures.
"When we're finished," Mr. Brown promised, "we're convinced we'll have the largest network of independent tire dealers linked electronically in the country."
Under the direction of Bill Paule, the new unit will be responsible for ongoing development and support of the company's two proprietary software products: Wheel Wizard, which was created by Mr. Paule and acquired by Heafner in 1998, and HeafNet, a Windows-based dealer ordering program.
The group also will be responsible for developing the company's private brand Web sites and will offer Web site development resources to independent dealers.
Since its 1995 debut as a business-to-business communication product, HeafNet has been updated five times. According to Heafner, more than 900 independent dealers are linked electronically via the system to the firm's distribution centers in the southeastern U.S.
At the Las Vegas show, the company introduced to its growing legion of West Coast dealers the availability of HeafNet, which allows dealers to check inventory and pricing, account information, receive notification of specials and promotions, and place orders for delivery on the next delivery truck, Mr. Paule explained.
Wheel Wizard, a computerized sales tool, allows a dealership's customers to view a variety of tire, custom wheel and suspension kit combinations on their vehicles before making a purchase.