TORRANCE, Calif. (Jan. 18, 2002)—Winston Tire, one of North America's largest independent tire dealerships, filed for Chapter 11 bankruptcy protection Jan. 15 in the United States Bankruptcy Court's Central District of California, Los Angeles Division.
The Torrance-based dealership filed the voluntary bankruptcy petition to complete the implementation of a comprehensive recovery plan that was in progress prior to the filing, Winston said in a press release. Based upon this plan, Winston projects that “it will regain profitability within the next five months and that it will successfully emerge from Chapter 11 as a leaner, stronger and more profitable business within seven months.”
Already the dealership has secured a $1 million line of credit and is currently lining up an additional $2 million to $5 million in trade credit from its major suppliers, Winston said. (Goodyear is one of the company´s major suppliers.)
The dealership also has the support of its key suppliers, said Ron Vines, Winston president and COO.
“We have filed a plan with the court that we feel our creditors will view very favorably,” he said. “We have every reason to believe our key suppliers intend to stay with us through this.”
In the last few weeks, Winston has closed eight stores and is in the process of shutting another 12, Mr. Vines said. Once these actions are completed, Winston will operate 114 retail tire outlets all in California.
Winston, which is owned by Performance Management Inc., based in Lafayette, La., but operated as a separate company, had taken significant steps to turn the business around since Performance acquired the dealership last May from Charlotte, N.C.-based Heafner Tire Group.
“We were getting close but were running out of time,” Mr. Vines said, adding that company “finally determined that the only clear way out was to take it to Chapter 11.”
During the Chapter 11 proceeding, Winston will continue to operate and provide goods and services to customers, the company said. The dealership, which has been in business nearly 40 years, posted $100 million in revenues in 2001.
“We anticipate we will come out of this in the very near future,” Mr. Vines said. “We still have a strong base of stores that do very well.”