Jim Hartman had had enough. Nearly 60 years old and not particularly happy with the present state of things, let alone the future, he decided to get out of the tire dealer game.
All he needed was a buyer for his Baltimore-based Kimmel Automotive Inc., which operates 34 stores in Maryland and Virginia.
Enter Monro Muffler Brake Inc. The Rochester, N.Y.-based company was looking to expand into exactly the places where Kimmel has locations: Baltimore and Tidewater, Va.
``The geography just fit perfectly,'' Mr. Hartman said of why Monro was such a good fit. ``They wanted to get into Baltimore and the next step for them south would have been Tidewater, Va. We really fill in the map for them nicely.''
Kimmel operates 15 Kimmel Tire & Auto Centers in metro Baltimore and 19 Tread Quarters Discount Tire outlets in the Tidewater area. Monro will buy all 34, as well as three commercial locations and a retread shop.
Monro agreed that points on the compass made the deal-which Mr. Hartman said should be complete by early April-a sensible one for the company. Financial details of the acquisition were not disclosed. Kimmel's 2001 sales were $29.5 million, according to Monro, of which $22.6 million came from the 34 retail stores.
``We've been on record as being in the market for acquisitions in our geography-acquisitions that make sense,'' said Bob August, Monro senior vice president for store support. ``This certainly is in our geography. It's a well-run business that will be a good fit.''
Neither side would say what would become of the three commercial outlets or the retread shop, all of which were included in the sale.
Mr. Hartman said he believed the retail employees would be retained, but there could be some changes at the management level. Mr. Hartman plans to retire.
The two chains will continue to operate under their existing names, Mr. August said. He added that Monro is likely to look for similar acquisitions, saying such transactions are part of the company's philosophy for growth.
As for Mr. Hartman, the choice to sell wasn't a difficult one. He had no one in his family to hand over the shop keys to, and had become disillusioned about how difficult the business was becoming in terms of regulations. Kimmel was founded in 1938.
``My tolerance for (government) interference in business has decreased as I have aged,'' he said. ``Every time you turned around and tried to do something along the lines of expansion, the local governments are getting more aggressive, too. I just became demoralized by these situations.''
He also became disenchanted because of the current cost of expansion. He didn't see his company as having the capital needed to expand, something Mr. Hartman feels his company needs to do.
``We're a little behind in terms of new locations,'' he said.
``I didn't want to put a strain on the company. Monro has the capital to do something like that.''
Mr. August, meanwhile, said Monro is looking to grow primarily through acquisitions. He said Monro looks for existing entities that do primarily the same things Monro already does.
That way, wholesale changes won't be necessary-something Mr. Hartman hopes includes the employees.
``Hopefully (Monro) will have an opportunity for all the retail employees,'' he said. ``They'll need them as much or more than we do.''
Mr. August echoed the sentiment, saying: ``They would benefit from our service expertise and we would benefit from their tire expertise.''
Monro has 514 stores in 17 Atlantic Seaboard and Midwestern states. That includes approximately 110 Speedy Muffler King shops, part of a 1998 acquisition.
The Kimmel deal will expand Monro's annual sales by about 10 percent to approximately $250 million. Brakes are Monro's largest single sales item, at 34 percent of sales, followed by mufflers and exhausts, 26 percent, and steering, suspension and alignment work, 16 percent, according to company documents.
Tires currently represent about 10 percent of Monro's sales, whereas Kimmel derives nearly 60 percent of its retail sales from tires and related services.
Monro sells Goodyear and Firestone tires. Kimmel carries BFGoodrich, Continental, Cordovan, Dunlop, Goodyear, Michelin, Toyo, Uniroyal as well as some private brand tires.