COLUMBIA, Miss. (March 31, 2003) – Bandag Inc.'s pending sale of seven stores and three retread plants each in Louisiana and Mississippi to Southern Tire Mart L.L.C. puts Southern Tire owners Thomas and James Duff right back where they wanted to be all along—in charge of a growing company with a dedicated work force devoted to customer service and practicing proper financial discipline.
“We never really wanted to sell in the first place,” Thomas Duff said, referring to Bandag's purchase of Southern Tire Mart and five other Bandag-affiliated commercial dealerships in 1997 to create TDS. “We were always interested in getting back into the business.”
The Duff brothers worked for TDS for about 18 months after the creation of TDS in mid-summer 1997. Since then, they've improved their golf games, watched the stock market soar and crash and got bored, according to Thomas Duff, the elder of the two brothers at 46. James is 41.
“Once our five-year non-compete clause expired,” Mr. Duff said, “Bandag approached us to see if we were still interested. We were and that set the negotiations in motion.”
As part of the deal, the Duffs reacquired the Southern Tire Mart name and even bought back the company headquarters building in Columbia, where their father Ernest had started the business in 1974.
The business being acquired in Louisiana and Mississippi should equate to about $60 million to $65 million in annual sales. The Duffs also have an option to purchase 10 TDS outlets and five retread plants in Texas 18 to 36 months hence; these operations would add another $15 million or so in annual sales.
The most important asset, though, Mr. Duff said, is the people. “The nucleus of the work force we had in place then is still there,” he said. “It's a great feeling to be getting re-acquainted with them, as well as with our former customers and other industry friends.”
The new Southern Tire Mart will start business with about 350 employees.
Parallel to re-establishing Southern Tire Mart and acquiring the stores and retread shops, the Duffs also re-established supply ties to Michelin Americas Truck Tires. TDS stores do not carry Michelin tires because Michelin severed supply ties to the tire distributor in 1998 “for competitive reasons.” Shortly thereafter, Michelin announced the launch of its Michelin Retread Technologies Inc. unit.
Mr. Duff described Michelin's support of the decision as “enthusiastic.”
Mr. Duff said Bandag was “fair and honorable” throughout the negotiations, and that Bridgestone/Firestone also has lent considerable support. He declined to comment on the value of the transaction or of the option for the Texas activities.
Southern Tire Mart's option for the Texas stores may be exercised at any time during the period beginning 18 months from the final closing of the sales and ending on a date 36 months from the final closing. Mr. Duff said he and his brother requested this option to allow them to get back into the business one step at a time.