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October 23, 2000 02:00 AM

Dealership's `rat brigade' a profitable one

Don Husat
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    TUCSON, Ariz.—It's no coincidence that Jack Furrier's Western Tire Centers derives a growing percentage of its business from servicing customers active in off-roading: All of the company's stores are located in the desert Southwest, where outdoor adventuring is a way of life.

    The majority of Jack Furrier's 20 locations in Arizona and New Mexico are traditional tire and service locations, but it is the company's Desert Rat Truck Centers, which currently number six, that are driving the firm's most rapid growth.

    That, in turn, is why the company is investing its business expansion dollars into more of those stores, owner Jack Furrier said. The four Desert Rat Truck Centers that have been open at least a year have generated more than 40 percent of the company's revenues of late.

    As the name suggests, these specialty stores equip four-wheel-drive vehicles and light trucks with accessories for off-roading in Arizona and New Mexico. Among the Desert Rat Truck Centers' offerings are suspension parts, winches, lights, specialty tires and wheels, and modification services. The stores average about 11,000 square feet.

    Two new Desert Rat Truck Centers opened in Arizona in early October—one in Tucson and one in Mesa. Another Desert Rat store—the firm's seventh—will be open by year-end on the north side of Phoenix, joining an existing store in Tempe and the Mesa store in the Phoenix metro area.

    There's also an outlet in the Albuquerque, N.M., market, and Mr. Furrier said his company is exploring entering new markets even further west.

    While the specialty stores are leading the company's growth, Jack Furrier's Western Tire Centers also is enjoying steady growth in its traditional tire business as well.

    The number of units the company sells is increasing at the rate of about 5 percent annually, Mr. Furrier said, in spite of increasing competition from a relatively new market sector—car dealerships.

    He said he believes his company's advertised "all-inclusive" price policy is a key to that growth. The stores are large, too, enabling them to provide a full range of automotive services. The smallest stores have six service bays, while the newer ones have 10; automotive service accounts for a quarter of the firm's retail sales.

    While tire retailing always has been a competitive business, it has become even more so of late because some automobile dealers are increasingly marketing their service departments as tire stores, Mr. Furrier said.

    For example, Ford Motor Co. has promoted its "Around the Wheel" program effectively in Arizona, and that competition will increase even further if General Motors Corp., Daimler-Chrysler A.G. or other auto companies begin promoting the sale of tires and related services, he said.

    The company has no immediate plans to open more of the traditional Western Tire Centers, Mr. Furrier said, because its strategy is to be the major player in any market in which it competes. That is why its retail tire and service center business is concentrated in the Tucson area, where it does have a large market share. On the other hand, the Desert Rat Truck Centers are more concentrated in and around Phoenix.

    "We have the Tucson area well covered at this time," Mr. Furrier said, "although we might consider one more tire store if the location and price were right." There are no Jack Furrier Western Tire Centers in the Phoenix area, however, and there are no plans to open any.

    "To become a major player in and around Phoenix would require us to open about 20 stores," he said, noting that area already has enough large retail tire players.

    After chalking up sales of $23 million in 1999, Mr. Furrier forecasts about 9 percent growth this year, pushing revenues to about $25 million. Eleven of the company's 20 outlets are traditional tire and service centers.

    Two are "Ultra Performance" stores that modify standard production cars for luxury, touring and sports car uses, and one is a commercial/wholesale tire location.

    Between the Ultra Performance and Desert Rat stores, the vehicle modification business accounts for more than 40 percent of the dealership's total retail sales.

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