BOUND BROOK, N.J.—Somerset Tire Service Inc. is making steady progress toward its goal of reaching 100 stores in the next few years and is considering acquisitions as one way to help it get there.
The employee-owned dealership added eight retail stores during the past year in existing markets and has at least 10 new stores on the drawing board for the next 12 months.
With the past year's additions, the STS Tire and Auto Center network now stands at 73 stores in four states—New Jersey, Pennsylvania, New York and Massachusetts.
Beyond these traditional marketing areas, STS is eyeing further expansion into New England, including Connecticut, and into Delaware, as well as continued growth in eastern Pennsylvania, President Bill Caulin said.
The company also operates eight wholesale distribution centers, having closed one in June in Cherry Hill, N.J. STS consolidated that center with another it owned nearby, Mr. Caulin said.
Going forward, STS plans to continue its strategy of buying real estate and developing new stores. Several of the new outlets being planned should open by Dec. 1, Mr. Caulin said.
But the dealership also is looking to grow through acquisition, he said.
That could include strategic alliances with other dealerships or an outright purchase of businesses in the Mid-Atlantic region and New England, he said.
This past May, STS purchased McCleery Tire Service in Southhampton, Pa., a Philadelphia suburb, which included two retail stores and a wholesale distribution center.
"We'd love to acquire larger chains of the 10-store to 15-store variety," Mr. Caulin said.
A founding member of the Tire Alliance Groupe (TAG), one of the nation's largest tire-buying organizations, STS projects sales of $100 million in 2000, with 75 percent coming from retail and 25 percent from wholesale.
Of the company's retail sales, tires account for 40 percent, with automotive service providing the remainder.
STS sells Bridgestone, Firestone, Centennial, Continental, Gillette, Goodyear, Michelin and Toyo brands, as well as the Prodigy private brand, made for TAG members by Yokohama Tire Corp.