SOUTHAVEN, Miss.-Treadways Corp. isn't enduring any consumer ``flight to quality.'' Rather, the private brand marketer based in North Wales, Pa., is enjoying its own flight to quantity.
Treadways on April 10 opened its new 468,000-sq.-ft. distribution center in Southaven in northwest Mississippi, just a short distance from Memphis, Tenn. Located on 23 acres, the new building will warehouse Treadway's six tire brands (Sumitomo, Laramie, Eldorado, Jetzon, Telstar and Centennial). Orders for such supplemental products as Doral, Omni and Treadways' brand tubes also will be shipped from the new building.
``What (the new warehouse) really allows us to do for the first time ever is to utilize the synergies from having six different brands,'' Treadways President Dan Wire said. ``Previously, all brands were distributed from different directions. For the most part they were truckload programs by brands. This allows us to ship smaller quantities, but mix them by truckloads.''
Opening a multi-brand warehouse will allow the company to be a better supplier, Mr. Wire said. ``Everyone's aware of the SKU issues. It's difficult to stock all the sizes and types of tires. We're hoping customers will order smaller quantities, but on a more frequent basis. They'll always have product flowing to them, and they'll have less outages.''
The new facility eventually will employ 40, a company spokeswoman said. The company's Laramie-brand warehouse in Memphis also has been relocated to the property in Southaven.
Mr. Wire said initial feedback to the new center has been positive, adding that Treadways' goal was to get customers to adjust buying habits to take full use of the facility.
``Those customers that have (taken advantage), have been very complimentary that we have found a way to address this SKU proliferation,'' he said.
The distribution center's grand opening featured appearances by Mississippi Gov. Ronnie Musgrove and Southaven Mayor Greg Davis, among others. Tours accompanied the traditional ribbon cutting.
Mr. Wire is not concerned about the so-called ``flight to quality'' issue (see related story on page 1). ``We have not seen any of that and we, too, have high-quality products,'' Mr. Wire said. ``What we're seeing is the same thing we've seen before: The consumer is strongly influenced by the tire dealer standing in front of him. That tire dealer recognizes the quality of private brand products. We don't see our customers perceiving private brands as any less of a quality product. It does not seem to be of any concern to our customers, and we have discussed it with several.''
Mr. Wire said the perception of the public flocking to flag brand tires is a product of Goodyear's recent market share increase, which he attributed to the Firestone recall.
``Firestone even acknowledges that their business is off and that business is going somewhere,'' he said. ``It certainly would seem logical that someone that was buying a Firestone-branded product is not going to be a private-branded customer. He may go to a flag branded product.''