With Bridgestone/Firestone Inc.'s purchase in July of majority control of Morgan Tire & Auto Inc., the ranks of national independent retailers shrank by one, to two big players: Penske Auto Centers with 629 stores in 45 states and Discount Tire Co. with 450 stores in 19 states in four time zones.
In addition, Big O Tires Inc. competes from the Great Lakes to the West Coast with 492 franchised stores in 18 states.
Behind the national three is a bevy of strong and growing regional players, led by: Les Schwab Tire Centers Inc. in the Pacific Northwest/Rocky Mountains; Tire Kingdom Inc. (TKI) and Big 10 Tire Stores in the Southeast; Merchant's Inc. and Somerset Tire Service along the mid-Atlantic seaboard; Tire Warehouse Central, Town Fair Tire, and V.I.P. Discount Auto Centers in New England.
In California-the nation's largest market for tires and automotive services-the situation is not nearly so clear. Winston Tire, with 132 stores in California, is under new management since May, and AKH Co. Inc./Discount Tire has revamped its approach to the marketplace, turning 30 of its stores into franchises and selling a dozen other sites.
Discount Tire Co., which operates as America's Tire in California, has grown to 87 stores in the Golden State, while Les Schwab has moved strongly into northern California with 41 stores, and plans to open many more in the coming years. Northwest Tire Factory Group also has eyes for California, now that the marketing group has cleared up the situation regarding the Tire Factory name.
On a sales volume basis, Discount Tire is clearly head and shoulders above the crowd, reporting $1.29 billion in retail sales last year-an increase of 16 percent over 1999. The dealership opened 20 new stores in the past year and expects to open 30 to 50 more in the coming year.
The company is targeting both existing and new markets for many of the new stores, and has created an active consumer-driven Internet business as well, discounttiredirect.com.
While the major dealerships continue to grow steadily-more than half of the 67 dealerships ranked this year added stores in the past year-marketing/buying cooperatives around the country are expanding by some startling numbers. They're led by Michelin North America Inc. subsidiary TCI L.L.C.'s T3 program, which went from start-up to more than 250 stores in a year's time.
The past couple of years have seen the nation's two largest wholesalers-Heafner Tire Group and TBC Corp.-head in different directions. Heafner shed its retail holdings, selling the Winston Tire and T.O. Haas Tire chains, while TBC bolstered its Tire Kingdom chain through three separate acquisitions, boosting the store count by 27.
As many as 50 new Tire Kingdom stores-including several of the company's new performance tire and wheel format outlets-are being considered before year-end 2002, according to TKI President and CEO Orland Wolford.
Along with TKI and the network of 492 Big O franchises in the U.S. and 34 more in Canada, TBC plays a significant role in the marketplace, having a say in more than $750 million in retail sales.
Penske, after several years of contraction and consolidation, is gearing up for a growth spurt, with 30 to 40 new stores on the drawing board for 2002, according to Jim Wheat, president and CEO. Some of the new stores might be stand-alone locations. Penske also has begun a five-year, multi-million-dollar upgrading of its service offerings, covering new alignment, tire balancing and changing equipment.
Penske's plans represent a reversal of fortunes for the chain. From a high of 860 stores in 1995-when Penske Corp. agreed to take over Kmart Corp.'s automotive service business-Penske's store count has slid year by year to 629. It has closed underperforming stores or been forced to give up some stores because Kmart closed some locations where the auto centers were attached.
Of the major dealerships, Penske has the lowest per store sales average at slightly more than $465,000, which is less than half the $1.37 million average of the major dealerships profiled in this report.
Les Schwab's company-owned stores averaged nearly $3.5 million in sales apiece last year, ahead of Discount Tire's store average of nearly $3 million and 2.5 times the overall average. Next up would be Dunlap & Kyle Co. Inc., whose Gateway Tire stores average $1.74 million in sales.
Looking at the retail scene in general, the BFS takeover of Morgan Tire makes the Nashville, Tenn.-based tire maker the largest retailer of tires in North America, with more than 2,100 stores and an estimated $2.4 billion in retail sales of tires and automotive services.
BFS supplants Sears, Roebuck and Co., which generates an estimated $2.3 billion in sales from its 822 Sears Auto Centers and 225 National Tire & Battery stores.
Based on sales revenue, Discount Tires would be considered the No. 3 retailer at $1.29 billion-and that's 100-percent tires (and related mounting/balancing/etc.).
Wal-Mart Stores Inc.-with 1,350 Wal-Mart stores and 460 Sam's Club warehouse outlets that sell tires-reports about $1 billion in tire and tire-related sales. That puts it ahead of Goodyear, which trimmed its company store network to 768 outlets after closing or selling 79 Brad Ragan and Carolina Tire stores during the first quarter of 2001.
Goodyear's store network sales are estimated at close to $900 million-in the same league as Pep Boys, Manny, Moe & Jack, which reported $871 million in tire and auto service revenue last year, from 628 stores.
Les Schwab's sales last year of $814 million, generated from 245 company-owned stores, make the Prineville, Ore.-based dealership the No. 7 retailer nationally. The 548-store Big O network is considered the next largest, with combined sales of between $500 million and $600 million. Penske Auto figures in next, at $298 million.
Regionally, Penske shows up as one of the 10 largest retailers in eight of the 10 regions into which TB has divided the U.S. The regions are based largely on divisions the Rubber Manufacturers Association shows in its annual statistics directory.
In choosing the make-up of the regions, Tire Business editors looked at both natural geographic boundaries and the store ``footprints'' of the major independent retailers. (See charts accompanying this article.)
Of the 10 regions, independent dealers are considered the largest tire retailers in three-New England, where Town Fair Tire's 56 stores top the list; Rocky Mountain, where 213 Big O franchises make up the largest grouping; and Pacific, where Les Schwab tops the list with 273 company and member dealer stores.
Bridgestone/Firestone's retail stores-Firestone Mastercare, Expert Tire, Mark Morris and Tire Station-are the largest retail groupings in six of the 10 regions, while its newly acquired Morgan Tire network is considered the largest retailer in the Southeast.
This year's Tire Business top-ranked dealerships operate 5,721 outlets, down about 130 from a year ago, reflecting the disappearance of Morgan Tire's 545 stores from the ranking. Discounting the Morgan Tire factor, the net growth by the remaining dealerships was 234 stores over 2000, according to the survey data.
New to the lists this year are:
* Performance Management Inc., which acquired California's Winston Tire chain from Heafner. Besides Winston's 132 stores, Performance Management, under the guidance of C. Bryant Kountz, operates 11 stores in Louisiana under the Allied Discount Tires name.
* Southern Indiana Tire Co., whose 17 stores under four different names allow this Zurcher Group affiliate to make the listing.
* Black's Tire Service in Whiteville, N.C., growing to 15 stores in North and South Carolina this year with the addition of two former Brad Ragan/Carolina Tire stores after Goodyear decided to sell or close nearly all these outlets throughout the Southeast.
* Frasier Tire Service of Sumter, S.C., which also added two former Carolina Tire stores to its network, bringing its store count to 15.
Returning to the list on its own accord is T.O. Haas Tire Co., which was the subject of a management buyout two months ago from Heafner.
Besides those dealerships already discussed, dealerships that grew measurably in the past year include: Fountain Tire Corp. of Edmonton, Alberta, up 14 stores to 115; Town Fair Tire Centers of East Haven, Conn., up five stores to 56; Mr. Tire Auto Service Centers of Baltimore, up seven stores to 42; Kauffman Tire Inc. of Atlanta, up five stores to 39; Sullivan Tire Co. Inc. of Norwell, Mass., up six stores to 38.
A few dealerships shed stores in the past year. Besides AKH, Fletcher's Tire & Auto in Phoenix ``downsized'' to 24 stores from 36, and Cash America Inc. is in the process of closing 21 of its 43 Rent-A-Tire stores before divesting the Texas chain.
In all, Tire Business has identified 100 independent tire dealerships in North America with 10 or more company-owned stores. These 100 chains operate 4,160 stores and represent nearly $6 billion in sales of tires, automotive services and related services and products.
Of the brands carried by the major dealerships, Michelin would be considered the most popular, carried by 41 dealerships operating 3,356 outlets, followed by BFGoodrich, carried by 38 dealerships with 2,996 outlets. Goodyear is next, carried by 42 dealerships, but the number of outlets they have is lower at 2,976.
Michelin's Uniroyal brand is next, offered by 32 dealerships with 2,746 outlets, then comes: General Tire and Pirelli at 27 dealerships each, operating 2,469 and 2,452 outlets, respectively; Continental at 23 dealerships with 2,385 stores; Bridgestone and Firestone at 28 dealerships each and 1,778 and 1,711 outlets, respectively; and Kelly-Springfield at 24 dealerships with 2,007 stores.