NEW HAVEN, Conn.—Pirelli Tire North America Inc. sank deeper into the red last year as sales fell 12.9 percent to $172 million.
The New Haven-based tire maker attributed the loss to "consolidation of our business into the Pirelli brand," a company spokesman said. He declined to comment on the specifics of Pirelli Tire's 1999 results. The unit's loss of $10.7 million was 25.9 percent greater than in 1998, according to the annual report of its parent, Pirelli S.p.A.
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 part of Pirelli Tire'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 in the premium category while Cooper brands fill the mid-price and entry-level categories. The firms introduced this multibrand market approach in January.
The 1999 sales decline also was a result of Pirelli Tire's exit from Sam's Club, another decision affected by the Cooper alliance, the spokesman said.
"That had a significant impact, both on sales and profits," he 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 make projections, but said "we felt 1999 was a base that we could build on with the Cooper alliance."