MANASSAS, Va.—Merchant's Inc. is exhibiting signs of having a split personality. For about 57 years, the dealership has been a loyal Firestone customer, but in recent years it also has been a member of Michelin North America Inc.'s Alliance dealer program. After its usual year-end evaluation of product offerings, Merchant's began the new year featuring a somewhat different mix in its retail showrooms—a lot more Michelin tires.
"We have agreements with both Michelin and Bridgestone/Firestone to supply us with tires. But we take a look at our lineup every year and try to determine what's best for our customers," said Steve Steffens, Merchant's vice president of marketing. "We have, for our (year) 2000 line, more of the Michelin family of brands in our retail stores than we've had in the past."
While he couldn't say how much more, percentage-wise, Mr. Steffens told Tire Business that, at least for this year, there will indeed be a "diminished number" of Bridgestone and Firestone products in Merchant's 113 retail and nine commercial/retail outlets.
"It just seems (Michelin's) tire lineup—with Michelin, BFGoodrich, Uniroyal and their associate brands—do a great job matching up with what our customers want. So they will have a good presence on our sales floor."
That does not mean BFS-made tires will disappear from the stores.
The dealership will still carry "some Firestone tires" on the retail side, he said, "specifically in the light truck area, where they have a great presence on the original equipment side. Some of those tires are what our customers want, so we're just trying to match up our stores and inventories to what our customers want."
He would not comment on the number of Michelin-made units Merchant's expects to handle. But according to the tire maker's Alliance program, a dealership must commit 51 percent of its tire purchases to Michelin product. BFS expects a similar quota from retail dealers who participate in its TireStarz USA program, which is part of its Family Dealer Channel.
Rather than ink new supply agreements annually, Mr. Steffens said Merchant's reviews them, then renegotiates prices and terms along with the type of support from the manufacturers "to help sell those tires to our customers. We try to get the best deal for our stores and our customers."
On the wholesale side, Merchant's will continue to feature BFS products—which Mr. Steffens noted "are still big business for us"—as well as a wide selection of Michelin product. But "you only have room for so many lines of tires in a retail store."
"With their baby commercials and positioning and brand presence, Michelin is a great tire for our customers," he continued, though he expects BFS-made tires will continue to "sell really well" for the dealership.
Merchant's operates stores in Virginia, North and South Carolina, Maryland, Washington, D.C., and Pennsylvania. The company, which set a goal of doubling in size by 2004, has seven new retail outlets under construction and plans to open 20 or more this year.
In February, Mr. Steffens said, the company is planning to announce it will enter two new markets contiguous to where it's already operating. And no, he added, laughing, "we're not going to California—yet."