AMELIA ISLAND, Fla. (Feb. 23, 2001) — February may be a cold and dreary month in some parts of the country, but it´s been a hot one for expansion-minded Purcell Tire & Rubber Co. During a 10-day span in early February, Purcell expanded both its retail and commercial operations in separate deals with Heafner Tire Group Inc. and Wingfoot Commercial Tire Systems L.L.C.
On Feb. 2, the Potosi, Mo.-based tire dealership bought an eight-bay Tire Outlet Plus store in Mesa, Ariz., and five undeveloped sites in the Phoenix metro area from Winston Tire, the West Coast tire chain owned by Charlotte, N.C.-based Heafner Tire Group. The deal resulted after Heafner decided to exit the Arizona retail market, said Al Chicago, senior vice president of Purcell´s Western States Tire, the dealership´s western U.S. and Latin American operation.
Purcell expects to break ground on two of the undeveloped sites March 1 and begin construction on the other three a month later, Mr. Chicago said, giving Purcell 17 retail stores in the Phoenix area before year-end.
Then on Feb. 12, Purcell closed a deal with Goodyear´s Wingfoot Commercial Tire Systems, in which it acquired two former Treadco Inc. facilities—a retread plant and commercial tire center in Las Vegas with $5 million in annual sales and a commercial tire center in St. Louis.
Goodyear formed Wingfoot Commercial Tire last year, combining its Goodyear commercial tire centers and its Brad Ragan commercial tire operations with those of Treadco to create the world´s largest commercial tire service network.
Purcell took over the leases and property of both Treadco facilities, said Robert Purcell, president of Purcell Tire. The former Treadco units "had excellent market penetration in these locations," he said, "and this fit with what we already had there."
He cited existing market conditions as the reason for the acquisitions.
"The way I see what´s happening in the tire business is that there´s tremendous consolidation and buyouts going on," Mr. Purcell said. "If you stand still you´re going backwards."
Purcell Tire is certainly applying that philosophy in the rapidly growing Phoenix market. Since 1982 when it began business in Phoenix, the company has built a chain of 11 retail stores, operating as Purcell´s Western States Tire.
Now with its purchase of the former Winston sites, Purcell is ready to expand once again.
Interviewed during the Tire Association of North America´s annual Off-The-Road Conference Feb. 15-17 at Amelia Island, where he served as conference chairman, Mr. Chicago said each of the new retail-only facilities will feature 10 service bays and offer a full line of automotive services.
He expects construction will take about five months, making the first two stores ready for business Aug. 1, and the other three by September, he said. When fully operational, the additional sites will give Purcell 17 retail stores in the Phoenix market, along with a commercial tire center, a retread shop and a wholesale facility.
All of the new stores will operate under Purcell´s Western States banner.
"The reason we´re buying and expanding is that we have to expand with the population explosion of the Phoenix area," Mr. Chicago said. "So we have to have locations in all corners of the Phoenix market."
The additional stores also make sense in that they enable the firm to spread out its advertising and other variable costs, Mr. Purcell added.
As for the former Treadco operations, Purcell plans to keep both facilities even though the company already has locations in both cities.
While in St. Louis the new commercial center will complement Purcell´s current retread/commercial operation, the dealership will combine the retread plant it acquired in Las Vegas with one it already owns "to make one giant one," Mr. Chicago said.
That new plant, which will be located at the newly acquired facility, will open April 1 with 45 employees and production capacity of 160 units a day using the Goodyear retreading process.
The second Las Vegas location will continue to operate as a commercial dealership, Mr. Chicago said. Purcell did not disclose the cost of the acquisitions, which follow two other deals the Missouri dealership made last summer.
In July, Purcell acquired Tom´s Tire & Service Center, a retail and commercial dealership based in Albers, Ill., with six locations in Illinois and two in Missouri. Then in August, the company bought off-the-road tire retreader Heartland Retreaders Inc. based in Kansas City, Kan.
Once all of its latest acquisitions are ready for business, Purcell will operate 67 locations in 11 states. Sales should reach more than $170 million annually.