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November 04, 2003 01:00 AM

Discount Tire nation's top tire retailer, but TBC's gaining

Bruce Davis
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    AKRON (Nov. 4, 2003) — Discount Tire Co., the nation's No. 1 independent tire retailer for the past two years, will have to share the crown next year after TBC Corp. completes its acquisition of and integrates the 226 stores of Sears, Roebuck and Co.'s National Tire & Battery (NTB) chain.

    That deal, plus organic growth, will push TBC's retail holdings to nearly 600 company-owned stores in 24 states, primarily east of the Mississippi River, plus 600 Big O franchises in 22 states and two Canadian provinces.

    From a sales volume perspective, however, TBC/Tire Kingdom will still take a back seat to both Scottsdale, Ariz.-based Discount Tire and Prineville, Ore.-based Les Schwab Tire Centers Inc., both of which report significantly higher sales per retail store.

    Outside of TBC—which absorbed Merchant's Inc.'s 112 stores earlier in the year and made the NTB deal in September—the industry was fairly quiet on the mergers-and-acquisitions front in the past year. Of the 110 dealerships listed this year (the Top 100 contains 110 companies, due to ties), 47 reported adding stores in the past 12 months. At the same time, 19 dealerships closed or sold stores in the past year.

    Among those reporting significant growth were: Discount Tire, 22 new stores; Tire Discounters in Cincinnati, eight new stores; Big 10 Tires in Alabama and Certified Tire & Auto Centers in Southern California, seven each; A.T.V. Inc./American Tire Depots in Southern California, Delta World Tire in Louisiana, and Kal Tire in western Canada, five each.

    There are 16 dealerships new to the Tire Business Top 100 ranking this year, starting with No. 4, Best One Tire & Service. This 141-store chain actually is a network of a couple dozen individual dealerships spread out across 10 midwestern and Appalachian states. All are owned in part by Paul Zurcher, owner of Zurcher Tire in Monroe, Ind.

    The Zurcher Group—as the collective of allied dealerships is known colloquially—launched the Best One Tire retail identity program five years ago, and now the member dealers have opted to be known more formally as Best One. Hence the debut of the group at No. 4 on the Top 100.

    Listing Best One meant the departure of two dealerships that have been part of the Top 100 for a few years: Southern Indiana Tire of Princeton, Ind., and S&S Tire Inc. of Lexington, Ky., with 22 and 16 stores, respectively.

    After Best One Tire come Vernon, British Columbia-based Kal Tire, 114 stores, Edmonton, Alberta-based Fountain Tire, 113 stores, and Bound Brook, N.J.-based Somerset Tire Service, 104—making a total of seven dealerships with 100 or more company-owned stores.

    Rounding out the Top 10 are Mobile, Ala.-based Big 10 Tires; East Haven, Conn.-based Town Fair Tire Centers; and Allen Park, Mich.-based Belle Tire.

    Other debutantes are:

    * American Tire Depot: a 25-store, Michelin Americas Small Tires (MAST)-affiliated chain based in Irwindale, Calif.;

    * Superior Tire & Auto Centers: the Las Vegas company has 16 stores, co-owned by TBC Corp. and Goodyear after Mountain View Tire sold its stake in the dealership to Goodyear;

    * Evans Tire & Service Centers: 13 stores in the San Diego area (formerly part of AKH Inc./Discount Tires in California);

    * Delta World Tire Co.: a MAST affiliate in New Orleans that grew to 12 stores from seven in the past year;

    * Mock Tire & Auto Corp.: a 12-store chain in North Carolina;

    * U.S. Autocare L.L.C.: the Detroit-area Big O Tires franchisee opened 12 Big O outlets in former Penske Auto Centers Inc. outlets in Michigan;

    * Briggs and Sons Tire: the Fayetteville, N.C., dealership grew by three outlets in the past year to 10;

    * K&W Tire Co. Inc.: a regional wholesaler in Lancaster, Pa., it also does retail at its 10 locations; and

    * Goodguys Tire & Auto Repair, of Fresno, Calif., Les Pneus Robert Bernard of Saint Paul d'Abbortsford, Quebec, Sun Tire Inc. of Jacksonville, Fla., Valley Forge Tire & Auto Centers of King of Prussia, Pa., and Ziegler Tire & Supply Co. of Massillon, Ohio, each added one outlet to reach 10;

    In addition, two dealerships that had been listed in previous years returned: A to Z Tire & Battery Inc. of Amarillo, Texas, and Coast Tire & Auto Service (2002) Ltd. of Saint John, New Brunswick, with 20 and 17 company-owned stores, respectively. Both are principally commercial tire dealerships but do retail business as well at most of their stores.

    Disappearing from the ranking were: Merchant's Inc. (bought by TBC/Tire Kingdom); Winston Tire Co. (bankrupt); Southern Indiana Tire and S&S Tire (now reporting as part of Best One Tire); Chabill's Tire Service Inc. (closed one store); and Target Tire's Buffalo Tire retail unit (sold or closed five stores).

    Winston's demise at the end of 2002 resulted in the growth of Goodyear's Just Tires network by more than 40 stores, and a dozen or so individual stores went to other independent dealerships in Southern California. Among those that took over Winston stores were: Goodguys Tire & Auto Repair; A.T.V. Inc./American Tire Depot; Certified Tire & Service Centers; and Ramona Tire Inc., based in Hemet, Calif.

    Two dealerships missing from this year's rankings that might merit inclusion in the future are ProCare Automotive and Monro Muffler Brake Inc., with 124 and 561 outlets, respectively. They were not included in this year's rankings because tires represent only 10 percent or less of their respective sales.

    Cleveland-based ProCare, which added four new outlets since Jan. 1, has put a new management team in place. Former President/CEO David Sullivan is still a part owner of the company and a board member but no longer at the helm of the primarily auto service chain. An executive with the firm would not identify the new officers or explain what precipitated the change.

    Monro Muffler's acquisition in 2002 of Kimmel Automotive and Frasier Tire Co.'s retail outlets give the chain 44 stores with a distinct tire specialization, and Monro management has stated on several occasions it intends to leverage this tire expertise more deliberately throughout the rest of its stores.

    Discount Tire heads the dealers league in retail-related sales, with $1.54 billion, followed by Les Schwab, $913.3 million and Tire Kingdom, $299 million, although Les Schwab's per store average of $3.36 million leads Discount's $3.04 million. The average store sales for all dealerships surveyed was $1.81 million.

    Seven of the top ranked dealerships are affiliated with American Car Care Centers Inc., representing 484 outlets. Close behind is Tire Alliance Groupe (TAG), also with seven dealerships in the Top 100 covering 411 outlets.

    Bob Sumerel Tire Co., Dobbs Tire & Auto, Craven Tire & Auto and a handful of other nationally known dealerships have formed the National Retail Tire Network, a loose coalition of nationally recognizable independent dealers who meet quarterly to discuss business issues. The NRTN does some collective buying of goods and services, but for now that's not the key focus, said Craig Sumerel, vice president of Bob Sumerel Tire.

    The Top 100/110 easily could have become a Top 120 or even 125: Tire Business has identified a dozen more dealerships throughout the U.S. that operate nine stores and 15 others with eight stores.

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    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

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