DETROIT—Belle Tire Distributors Inc., now one of the nation's 10 largest independent retail dealership chains, hopes one day to be No. 1. The company, based in Allen Park, Mich., expected to have more than 50 stores by the end of last year, with projected 1999 sales of more than $140 million, up 12 percent from 1998.
Those numbers don't include more than a dozen stores Belle is negotiating to buy in metro Detroit, Flint and Grand Rapids or the five new Belle Tire locations in the planning or construction stages set to open in 2000.
Company executives are hoping that within the next two decades the chain hits the 500-store mark.
On Nov. 24, Belle Tire opened its 47th retail store—the company's largest to date—in Southfield, Mich., a Detroit suburb.
The new 13,000-sq.-ft. "state of the art" facility has 10 service bays, 20 employees and room to stock more than 4,000 tires. It is managed by Mark Hanselman, a Belle Tire employee for the past three years.
President Don Barnes Jr. said the new outlet fills a previous void for the company in the Southfield area.
Besides its retail network, the 77-year-old dealership also operates four Bandag retread plants and seven commercial tire service centers offering 24-hour emergency road service.
Belle Tire, which employs 800, carries Goodyear, Michelin, Firestone, BFGoodrich, General and Kelly brand tires in addition to Cragar, Enkei, Superior and Prime custom wheels. Its retail outlets also perform a variety of automotive services, including wheel alignment, brake, suspension, cooling system and air conditioning work.
The new Southfield retail store is equipped with "the best diagnostic equipment in Michigan," the company said.
Vice President Jeff Kruse said this includes a new four-camera, digital alignment system from Hunter Engineering Co. that requires "only 30 seconds" to analyze the alignment of the vehicle's wheels. "No other company in the state is using this type of technology," he said.
Nationally, independent tire dealerships such as Belle Tire have consolidated and have increased their share of the U.S. retail tire market from 42 percent 20 years ago to about 56 percent today.
During those same years, department store chains, stores owned by tire manufacturers and small service stations have seen their share of the national tire market slip. Warehouse clubs, a relatively new entrant to the tire wars, have 8 percent of the retail market.
However, consolidation continues. Sears, Roebuck and Co., for instance, began consolidating last year, paring down its National Tire and Battery (NTB) chain by 33 stores in a number of markets nationwide. Several months ago NTB exited the Michigan market altogether.
"The closing of NTB (in Michigan) illustrates how competitive the retail tire business is in Detroit," Mr. Kruse said.
Belle Tire believes in investing in new stores, offering the latest high-tech equipment, he said, and giving employees the most advanced training available.
"You're either growing or you're dying," Mr. Barnes said. "We just had the biggest retail day ever in our history the day after Thanksgiving."
Mr. Barnes, 44, said he used to hope to have 50 stores by his 50th birthday. Now he hopes to have 500 stores before he and his 43-year-old brother, company CEO Bob Barnes, turn 65.
The nation's largest independent chain, Discount Tire Co.—which was founded in Ann Arbor, Mich., and is now based in Scottsdale, Ariz.—has more than 400 stores. Other major independent chains also have grown, buying or winning business from smaller companies.
Belle Tire's projected 1999 sales would make it the nation's ninth-largest independent tire dealership, according to Tire Business estimates.
Belle Tire Advertising Director Michael Groves said the company spends more than $4 million a year on marketing.
A strong emphasis on customer satisfaction as well as a marketing campaign promising "we beat all deals or it's free" have fueled the dealership's success, making the company a dominant force in Michigan, said Lee Fiedler, who retired last year as CEO of Goodyear's Kelly-Springfield Tire Co. unit, one of Belle Tire's largest suppliers.
Chris Lynch, owner of Wetmore Tire Co. in Ferndale, Mich., said he competes with two or three Belle Tires outlets within a few miles of his single-store, 71-year-old business. The only way smaller stores can compete is with "service, service, service and giving customers special treatment," he said.
"It is tough to compete with the big guy like Belle Tire," he said. "Belle Tire is trying to embed their name in the back of your head with all the advertising, so you hear it so much that you'll think of Belle Tire every time you think of tires."
Belle Tire's Mr. Hanselman, the new Southfield store manager, said the company employs 90 auto service technicians with ASE (National Institute for Automotive Service Excellence) certification.
"That should indicate how dedicated we are to our staff and our customers," he said. "We go the extra mile to ensure customer satisfaction."
Belle Tire, which started out with one Detroit store in 1922, was named for founder Sam Waze's wife, Belle.
Don and Bob Barnes' father, Don Barnes Sr., went to work for the company in the 1960s, became a partner and bought the company in the 1980s. He retired in 1990 but remains chairman.
The company has undergone most of its growth since the mid-1990s. It bought rival Tireman's 13 stores in 1994 and nine Metro 25 tire stores two years ago, as well as retreading plants in Detroit and Cleveland during 1998 and 1999.
The company currently gets nearly 70 percent of its business from its retail stores, another 25 percent from serving truckers and about 5 percent from a wholesale business selling tires to smaller one-store retailers.
Duane Rao—who spent 24 years in the tire business before selling about half his Metro 25 stores to Belle Tire and the rest to independent owners two years ago—noted that "people who are going to survive are part of large, large conglomerates."
Bigger independent retailers are able to strike the best deals with tire manufacturers, paying $30 each for as many as 5 million tires while others pay $60 each for much smaller volumes. Having multiple stores in a single market as Belle does also cuts down on per-store advertising and marketing costs.
Don Barnes Jr. said he considers "anyone who sells tires" to be competition and is always looking for new ways to compete.
"If you're a Sears in a mall, you pretty much have a captive audience with Sears shoppers using Sears credit cards to buy a set of tires while they're at the store, but outside the mall, it's a war," Mr. Barnes said.
"You have to be on your game. You have to be good."
Tire Business' Chuck Slaybaugh contributed to this report.