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November 20, 2000 01:00 AM

ProCare growing

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    CHARLOTTE, N.C.—Ever since entrepreneur and automotive aftermarket consultant David H. Sullivan and a group of investors bought the Cleveland-based BP ProCare automotive repair chain from BP Amoco P.L.C. about a year ago, the creative juices have been flowing.

    Grabbing its collective breath following the buyout, the company's plan to spur growth has taken root.

    Renamed ProCare Automotive Service Solutions L.L.C., the chain's stores were rebadged to replace BP's yellow and green with a patriotic red, white and blue color scheme, a new shop management computer system is being tested, and ProCare continues to promote its technicians as some of the most qualified—and certified—in the industry.

    Mr. Sullivan's not resting there.

    Speaking with Tire Business from Charlotte, a growing market for ProCare, he noted that since buying BP's 103 outlets he closed two underperformers in unproductive markets. On the other hand, his group acquired two other stores and has almost closed a deal to acquire four locations in Southern California's Orange County that are owned by independent dealers of a major oil company.

    That's what he called part of a "beta test"—a new approach for ProCare to acquire some "superstore-sized" service station operations larger than ProCare's typical six-bay service centers. Other deals being looked at or recently consumated include converting a Tune & Lube site in Milford, Ohio, near Cincinnati to a ProCare, and acquiring a 10-bay independent repair shop in Charlotte's Lake Norman area.

    The privately held firm is mounting a three-pronged expansion approach, said Mr. Sullivan, who has worked as a consultant with several major oil companies and helped Amoco digest the ProCare operation it got through its merger with BP. Under his guidance, ProCare plans to:

    Continue acquiring independent auto repair shops in its "footprint" territories of Ohio, western Pennsylvania and in the Charlotte area.

    Build new locations, from the ground up, in so-called "greenfields" where the company currently has no presence; and

    Continue pursuing opportunities to acquire, from major oil companies, dealer-owned service station sites that have high traffic counts and expansion possibilities.

    "We're looking at potentially adding 40 to 45 outlets per year, including two to three greenfields, the rest through acquisitions," Mr. Sullivan said, noting that, since taking over from BP, "we've increased the performance of the operations considerably." Sales are approximately $100 million, with tires accounting for only 5 percent of that.

    Michelin is ProCare's principal tire line, along with General.

    Southern California is a new market for the company and it's also eyeing opportunities in the Northeast. "Then we'll fill in the dots in between," he said.

    ProCare's overall goal is, in a word, ambitious. Or perhaps "global."

    The company is "seriously" looking at going international "one step at a time," he said. "We have an international partner ready to go to bring ProCare to the United Kingdom, France, Germany and Austria in 2001—if we're interested."

    The logistics of taking the operation overseas, however, are challenging because every country has its own "quirks" in how automotive service is delivered.

    But one potential avenue for growth in Europe would be through acquisition of major oil company service station sites, he said. Were that to happen, he sees his company doing battle with Kwik-Fit Holdings P.L.C., Europe's largest tire and automotive service chain, which was acquired in 1999 by Ford Motor Co.

    Stateside, ProCare has had a small capital outlay in 2000 for expansion. But to hit a pace of 40 new stores per year, Mr. Sullivan expects to spend between $10.5 million and $12 million annually.

    Although large sites in high-traffic areas are preferable for expansion, he said all locations don't necessarily have to be expandable, "as long as we can have at least three bays and perform full service. None of the service stations we're looking at have less than three bays and many have four. But the car counts in these locations are tremendous."

    The company has not dropped any auto services from its menu, and continues to offer everything from lubes, tire rotation and curing driveability problems, to big-ticket items such as complete engine and transmission overhauls.

    With the exception of body work, "there's no limit on what we do," he said. "It's one-stop shopping at every location, always."

    The biggest part of ProCare's business "is upscale diagnostics," he explained. "...It's amazing the number of new-car dealers who send cars to us because we've got more Level-1 techs than anybody."

    ProCare currently employs 500 ASE-certified technicians and, Mr. Sullivan said, 40 percent of them are what he called Level-1 or "master" techs. "We're very proud of that and have built our organization around that."

    A new tool in ProCare's arsenal is its "Pronet" system, which has been tested for the past four months in several stores and will be rolled out company wide in early 2001.

    He described Pronet as "a complete turnkey, interactive point-of-sale system that manages the car owner's family of vehicles and also interfaces with our new Web site and online appointment system."

    Once a customer's vehicle information is accessed, "he and we know more about that car—from what new-car manufacturers recommend for a particular vehicle, and from what others in the repair industry have found out about it," he said. The "Mitchell-On-Demand" repair database and a Triad auto parts component are also part of it.

    For five years, Jim Schrenkel has managed a ProCare store in Middleburgh Heights, Ohio. The high-traffic locale—alongside a busy interstate and just minutes from Cleveland's major airport—is crammed with restaurants, hotels and businesses. The store services between 350 and 400 cars monthly.

    A master certified tech, Mr. Schrenkel has been with the company 15 years, dating back to its BP ownership. Since mid-March, he's worked with Pronet which, he suggested, "takes us into the next phase" in auto service. Previously, he relied on a clunky, rudimentary non-Windows-based computer system.

    He demonstrated for Tire Business how, for instance, Pronet retains service recommendations so techs have each customer's complete vehicle history, along with manufacturer-recommended services based on vehicle mileage. With the old system, he noted, a tech had to pore through customer vehicle histories to find, in a "comments" section, what was recommended on the customer's last visit.

    The new system will help boost ProCare's routine maintenance business, he believes, by quickly listing customers and vehicles by names and dates of recommended service.

    "The customers love it because we don't have to try to remember what we told them the last time they were here," he said, adding emphatically: "This machine drives my business."

    Both he and Mr. Sullivan cited ProCare's "unique" warranty—two years or 24,000 miles, whatever comes last—as one of its biggest drawing cards. "I don't think anyone else is offering that," Mr. Schrenkel said, "and I don't think there's another repair chain that's so conscious of having so many ASE-certified techs. Our whole company focus is offering high quality services—to retain employees and customers."

    Customer reaction to ProCare's warranty has been "extremely favorable," Mr. Sullivan said.

    "We find that most consumers don't understand a competitive warranty very well. They don't know what to compare it to. We're the market leaders in (warranties), and we're trying to communicate that to customers so they understand the value of that."

    Under BP's regime, Mr. Schrenkel said, ProCare became somewhat stagnant in terms of marketing and advertising, for example. But he has noticed much improvement with the new owners—"there's definitely more commitment to growing the business and making us more competitive."

    "It's all about empowering our employees with our customers," Mr. Sullivan stated.

    Since the buyout, ProCare has upgraded equipment and technology and urges its techs to continue seeking training and ASE certifications.

    "You combine that with our friendliness and one-stop shopping, and that's really what the consumer wants today," he said. "Specialty has its place, but ProCare customers want one-stop shopping."

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