NEW HAVEN, Conn. (June 29, 2000)—Pirelli Tire North America Inc. posted a $10.7 million net loss in 1999 net income after sales fell 12.9 percent to $172 million.
A spokesman for the New Haven-based tire maker attributed the loss to its "consolidation of our business into the Pirelli brand." He declined to comment on the specifics of the unit´s 1999 financial report.
Pirelli Tire discontinued many of its broadline products, including its Formula brand and its Armstrong-brand light truck tires, in 1999.
The elimination of those and other associate brands was the result of the unit´s strategic alliance with Cooper Tire & Rubber Co. last year, in which the two tire makers agreed to a multibrand strategy that positions the Pirelli brand at the premium category while Cooper brands fill the mid-price and entry-level categories. The companyies introduced this multibrand market approach in January.
The 1999 sales decline also was a result of Pirelli Tire´s exit from the Sam´s Club distribution channel, another decision affected by the Cooper alliance, the spokesman said.
"That had a significant impact, both on sales and profits," the spokesman said.
However, Pirelli Tire expects its 2000 sales to improve now that the Cooper alliance has opened the Pirelli brand to new markets across the U.S., the spokesman said. He declined to comment on specific projections, but said "we felt 1999 was a base that we could build on with the Cooper alliance."