Goodyear is taking over the assets of financially ailing Winston Tire Co. and plans to convert 44 of the chain's 97 locations into Just Tires outlets and sell the rest to existing independent Goodyear dealers and other third parties.
One of the parties involved is an investors group headed by Winston Tire President/COO Ron Vines, which is negotiating to take over an unspecified number of locations and keep them operating as Winston Tire.
``We want to restart as a new company, with no debt and proper funding,'' Mr. Vines said, ``and keep the Winston name alive.
``We've had a favorable response from Goodyear thus far,'' he said. ``We're negotiating now how many locations might be available.''
Winston Tire, an independent mainstay in California for 40 years, has been operating under Chapter 11 bankruptcy protection since Jan. 15 after Performance Management Inc., Winston's owner since May 2001, encountered cash flow problems.
Goodyear, manufacturer of the Winston private brand tire line and one of the company's largest suppliers, also is one of Winston's biggest creditors, along with American Tire Distributors (formerly Heafner Tire Group), which had sold Winston to Performance Management.
Goodyear filed a petition recently in the U.S. Bankruptcy Court's Central District of California, Los Angeles Division, to effect an asset purchase of Winston Tire, based on accumulated debts, a Goodyear spokesman said. An interim management team now is running Winston's remaining 97 stores.
Financial details were not disclosed. The firm reported sales in 2001 of about $100 million.
The Chapter 11 filing from January listed Winston's liabilities with Goodyear at $17.4 million. Other creditors included ATD, $2 million, and MaddenCo Inc., a computer system supplier, $1.5 million.
A spokesmen for Performance Management could not be reached for comment.
Lafayette, La.-based Performance Management paid $11.3 million for Winston Tire, which in early 2001 operated 132 stores.
The store count was pared to 114 earlier this year at the time of the Chapter 11 filing. Based on the recovery plan filed at that time, Winston said it expected to ``regain profitability within the next five months'' and will ``successfully emerge from Chapter 11 as a leaner, stronger and more profitable business within seven months.''
At the time of Goodyear's filing for the asset takeover, Winston still had 105 stores, but closed eight at about the same time, leaving the 97 still in operation, the spokesman said. Goodyear will retain 44 stores and convert them to Just Tires outlets, to go with 37 existing stores in California, in the Los Angeles, Sacramento and San Jose metro areas.
Goodyear did not specify which Winston Tire stores it intends to keep.
Goodyear already is negotiating with independent retailers in California regarding the other 53 stores and could complete their sale by November, the spokesman said.
Just Tires stores concentrate on tires and tire-related services. Besides the Goodyear brands-Goodyear, Dunlop and Republic-Just Tires outlets sell Michelin, BFGoodrich, Pirelli and Continental brand tires.
Goodyear started Just Tires in Chicago in 1991. The network now comprises 113 locations, in the Chicago, Philadelphia, Baltimore/Washington D.C., Raleigh-Durham, N.C., and California metro areas already identified.