Two tire dealers who took over some Sears Canada Inc. automotive service centers were able to retain at least 95 percent of Sears employees-a major preliminary goal for the conversions.
Kal Tire and Active Tire & Auto Centre Inc. said they took over their share of Sears stores in June. In April, Sears Canada announced it was exiting the automotive aftermarket by divesting or closing its 49 auto centers. The decision did not impact Sears automotive stores in the U.S.
With the deal, Kal Tire gained 11 stores in western Canada, Active Tire got 11 in Ontario and President Tire Canada acquired 17 in Quebec and the Maritimes. Active Tire's 11 stores includes three that previously had been closed by Sears.
The agreement also gave the dealerships rights to the DieHard battery and Sears' credit card, which has some 9 million users in Canada.
Tony Milina, director of marketing for Vernon, British Columbia-based Kal Tire, said the company was able to retain 95-97 percent of Sears employees.
``We were very intent on keeping them because obviously we're looking for talented, enthusiastic people to help us grow as well,'' he said, adding the employees now are being trained.
A President Tire executive could not be reached for comment.
Both Kal Tire and Active Tire now are looking at renovating the outlets to conform to their stores' looks. Mr. Milina said the former Sears stores have a ``bland,'' neutral look that Kal Tire hopes to spice up with its signature orange and blue hues. He expects that work to be done by the end of summer in time for the winter selling season.
Kal Tire also is waiting to sell out the remainder of Sears' inventory before adding its own products, namely custom wheels.
``They're getting a bit of shock therapy from the store look and a merchandising perspective,'' he said.
In the meantime, Active Tire is working on arranging franchise agreements for all 11 stores. President Ralph Chiodo said two stores had been franchised by late June. Several others already are in the documentation process, he added. The Sears acquisition gave Active Tire a total of 42 stores, including franchise outlets.
Kal Tire intends to keep the Sears stores as company-owned outlets. Currently, 125 of its 176 stores are company-owned. President Tire previously said its 17 Sears stores would join its six other company-owned outlets. President Tire has more than 200 total outlets including franchise locations.
Mr. Milina said the smoothness of the transition so far has buoyed Kal Tire.
``As a company, we're very pleased, and it really helps our confidence as an operator that we can take an acquisition like this and handle it very smoothly,'' he said, referring to the actual physical conversion as well as adapting other services like information technology and payroll.