Skip to main content
EVENT TRACKER
Keep track of rescheduled, canceled industry events with our COVID-affected event tracker - Powered by Snap Finance
Close
Sister Publication Links
  • Rubber & Plastics News
  • European Rubber Journal
tb-logo
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • OPINION
    • CORONAVIRUS
    • AUTO INDUSTRY
    • BUSINESS/FINANCIAL
    • COMMERCIAL TIRE
    • FACTORY FIXES
    • GOVERNMENT & LAW
    • INTERNATIONAL
    • MOTOR SPORTS
    • NEW PRODUCTS
    • RETAIL TIRES
    • SERVICE ZONE
    • SEMA/AAPEX
    • SMALL BUSINESS
    • TIRE MAKERS
    • SPONSORED CONTENT
    • COVID takes dealers for roller-coaster ride
      A year later, pandemic's full tire industry impact unclear
      Tire Cologne canceled; rescheduled until 2022
      New round of Paycheck Protection Program funding opens
    • DTM switches horses mid-stream; awards race tire contract to Michelin
      Icahn Auto trims fiscal 2020 operating loss despite 14% lower sales
      Oshkosh unit gets contract for new USPS local delivery vehicle
      Sumitomo adds treadwear-detection to 'Sensor Core' toolkit
    • Titan eyes solid recovery in 2021 as ag sector rebounds
      4 Wheel Parts celebrates 60th anniversary with deals, promotions
      CarAdvise partnering with RepairSmith mobile repair services
      Goodyear to raise prices by up to 8% on all passenger tires on April 1
    • Michelin launches high-scrub, weight-sensitive X One Multi T trailer tire
      TRAC Intermodal redirects retread biz 100% in-house
      Giti rolling out range of GT Radial-brand urban/regional truck tires
      Conlan Tire buys BestDrive locations in Ark., Okla., Texas from Continental
    • USTMA joins coalition supporting passage of Equality Act
      McMahon's Best-One increases its minimum wage to $15
      Oshkosh unit gets contract for new USPS local delivery vehicle
      Conti recalling 94,000 Conti-, General-, Barum-brand LT/SUV tires
    • Goodyear names Patterson to lead Cooper integration efforts
      DTM switches horses mid-stream; awards race tire contract to Michelin
      Sentury's 10-year global expansion strategy will include plants in North America, Europe
      Rebound in car tire demand drives USTMA market forecast for 2021
    • DTM switches horses mid-stream; awards race tire contract to Michelin
      Bridgestone World Solar Challenge canceled due to pandemic restrictions
      Pirelli, Goodyear ink sedan racing series contracts in Canada, Europe
      Goodyear extends partnership with Nürburgring race circuit
    • Michelin launches high-scrub, weight-sensitive X One Multi T trailer tire
      Giti rolling out range of GT Radial-brand urban/regional truck tires
      Milestar Weatherguard AS710 to be made in Tennessee
      Michelin upgrades 2 lines of Energy-branded truck tires
    • COVID takes dealers for roller-coaster ride
      Investment groups to acquire Mavis Tire network
      Vogue Tyre offers $75 rebate on set of 4 tires during March
      4 Wheel Parts celebrates 60th anniversary with deals, promotions
    • Pennzoil offering carbon-neutral lubricants for passenger cars
      Washington dealership uses new-school solution for recruiting auto techs
      Marinucci: Customers may ignore dangerous conditions
      Automotive Lift Institute introduces Check360 inspection, label
    • TIA seeking nominations for Tire Industry Hall of Fame
      SEMA survey shows resilient auto aftermarket in 2020
      SEMA scholarships and loan forgiveness now available
      WTC hosting webinar Jan. 20 on load-capacity standards
    • SEMA survey shows resilient auto aftermarket in 2020
      Trade groups oppose minimum wage increase proposal
      New stimulus package fixes PPP loan confusion
      Vaccine may usher sense of normalcy
    • Titan eyes solid recovery in 2021 as ag sector rebounds
      Michelin launches high-scrub, weight-sensitive X One Multi T trailer tire
      Goodyear names Patterson to lead Cooper integration efforts
      Giti rolling out range of GT Radial-brand urban/regional truck tires
    • Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
      Sponsored By Yokohama Tire Company
      Stocking Tires for Crossover SUVs
      Sponsored By AppointmentPlus
      Three Important Lessons Learned for the Tire Business During a Pandemic
      Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
  • SHOP FLOOR
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Video: Balancing Tire
      Choosing the right balancing equipment
      Safety tips for wheel balancing
      An introduction to wheel balancing
    • Video: Demounting
      Demounting Equipment
      Making rims ready for a tight seal
      Tire changer types, tips and trends
    • Video: Safety
      Making friends with OSHA
      Ergonomics on the shop floor
      Customers
    • Video: Tire Repair
      Tire repair: Shining a light on visual inspections
      Staying safe when repairing a tire
      Essential tools, materials and equipment for tire repair
    • Video: TMPS Service
      Decoding sensor data for TPMS diagnosis
      Replacement TPMS sensor overview
      The life-saving work of TPMS
    • Video: Training
      Advantages of apprentice program partnerships
      Options and resources for CE tech training
      Internship ideas to attract tech talent
    • Video:Vehicle Lifting
      All types of lifts for all types of work
      Tips and recommendations for lifting safety
      The gravity of proper lift points
    • Video: Wheel Torque
      Using torque sticks to speed service times
      The danger of too much, too little torque
      The importance of torque specifications
  • Multimedia
    • VIDEOS
    • PHOTOS
    • PODCASTS
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
  • Data
    • DATA STORE
  • Resources
    • DIRECTORY
    • CLASSIFIEDS
  • ADVERTISE
  • DIGITAL EDITION
  • Awards
    • Tire Dealer Humanitarian Award
MENU
Breadcrumb
  1. Home
  2. News
December 08, 2004 01:00 AM

Dealers watch Sears-Kmart merger outcome

Lisa Aichlmayr, Tire Business staff
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    AKRON (Dec. 8, 2004) — Real estate has emerged as one of the prime considerations at the center of Kmart Corp.'s acquisition of Sears, Roebuck and Co.

    The same factor may be at the heart of what effect, if any, the merger will have on the retail tire and auto service businesses of competing in-dependent tire dealers.

    The two big-box retailers announced the $11 billion deal Nov. 17. The agreement will create a combined company, Sears Holdings Corp., with about $55 billion in annual revenues and 3,500 stores. Though presented as a merger, Kmart emerges as the buyer since its stockholders get one share of the new company for each Kmart share while Sears shareholders will elect for either $50 in cash or a half share in the new company per Sears share.

    Still, the deal seems to focus on growth of the Sears name. A “substantial number” of Kmart stores will be converted to the Sears nameplate, the companies said.

    “I think that the opportunity for Kmart to become Sears stores is far greater,” said the deal's architect, Edward Lampert, Kmart chairman and majority shareholder who also owns 15 percent of Sears stock. “I don't really think there is much (of) an opportunity for Kmart to go into malls.”

    For this reason, many industry watchers believe the deal—which creates the third largest retailer behind No. 1 Wal-Mart Stores Inc. and No. 2 Home Depot Inc.—is primarily a real estate deal. Especially considering the fledgling Sears Grand format—an off-mall, stand-alone store—Kmart's many locations in big-box shopping centers provide ample opportunities. Sears has opened four Sears Grand stores in the past 14 months. Observers also speculate about possible sales of Sears' 870 mall locations, which are valued at $5 billion to $7 billion.

    “I am totally convinced it's just a real estate deal,” Carole Pechi, a retail real estate attorney at Holland & Knight L.L.P. in Chicago, told Crain's Chicago Business, a sister publication of Tire Business.

    Real estate may be the key for the tire business as well. In 2002, Penske Auto Centers Inc. closed all 562 of its tire stores in Kmart outlets, leaving a spatial void that has largely not been filled. Kmart said more than 500 former Penske sites still sit empty. But a Kmart spokesman declined to speculate whether Sears' auto centers or a third party may fill some of those vacancies, noting more details should be clear after the deal is approved by the end of March.

    A Sears spokesman also said it's too early to know what role the retailer's auto centers will play in the redesigned company, though he added the centers are an important part of Sears' business. Sears Grand stores are expected to have an auto center component.

    “Sears Grand has really taken all the best that Sears had to offer and adding to that everyday and convenience transactional items” such as food and music, he said.

    Steve Wilson, president of U.S. Autocare in Southfield, Mich., will watch that development carefully. His 11 Big O Tires Inc. franchise stores are connected to Kmart stores—four are freestanding and seven are joined. The Rochester Hills Big O store will close by the end of February since that Kmart store was among a batch of 54 the retailer sold to Sears earlier this year. That Big O outlet will be replaced with another opening in Sterling Heights, Mich., in March.

    Mr. Wilson, a former Kmart executive, said he views the Kmart/Sears deal as a positive move for the retailers and his business.

    “People say, 'Well, it's two has-beens merging together and they're still only the third largest company,'” he said. “But when you take a look at what Sears does well and what Kmart does well and the brands that Sears brings and the real estate Kmart has, I think it's a win-win, and honestly we're looking forward to it.”

    Even since the announcement, he's noticed an uptick in traffic in the Kmart stores, he added. His stores posted the best month in company history in October and records for volume on the Friday and Saturday after Thanksgiving.

    The only ambiguity for U.S. Autocare would be whether his shops could stay if any of the Kmart stores where they're located become Sears stores. If they can stay, he said, “it's nothing but a positive for us.”

    Jay Huff, president of Brooks-Huff Tire & Auto Centers in Baltimore, said he's not expecting any impact from the merger. His more pressing competitive concern, he said, is the onslaught from Tire Kingdom Inc., which now owns Merchants Inc. and National Tire & Battery locations in the area, and Monro Muffler Brake Inc., which owns Mr. Tire and Donald B. Rice Tire Co. in metro Baltimore. Both companies have combined advertising for all those stores, Mr. Huff said.

    “Those are the things that I would say are affecting the retail automotive service market in the Baltimore metro area,” he told Tire Business. “The Kmart and Sears (deal) to me doesn't make one iota of difference.”

    He added that a Sears Auto Center down the road from one of his four shops often sends customers with complex service needs to him. Mr. Huff said Sears also has not been very aggressive in tire retailing.

    “I don't look for them to get out of that automotive end, but I also don't look for them to get more aggressive in it,” he said.

    Kerry Gross, owner of single-outlet Gross Tire Center Inc. in Williamsport, Pa., said he also isn't overly concerned about renewed competition from a combined Sears and Kmart. He said many tire dealers are easily intimidated by Sears, but he's found a good way to compete: Any customer who mentions Sears' lower advertised price is shown a list of the add-on charges the retailer carries, he said. With those factored in, Gross Tire's all-inclusive prices are competitive.

    “They're not giving stuff away,” he said of Sears.

    Again the only question mark for him is the empty Penske space sitting in a Kmart about five miles down the road.

    Crain News Service contributed to this report.

    Letter
    to the
    Editor

    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].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    tb-logo
    Reader Services
    • Contact Us
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber & Plastics News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • OPINION
      • CORONAVIRUS
      • AUTO INDUSTRY
      • BUSINESS/FINANCIAL
      • COMMERCIAL TIRE
      • FACTORY FIXES
      • GOVERNMENT & LAW
      • INTERNATIONAL
      • MOTOR SPORTS
      • NEW PRODUCTS
      • RETAIL TIRES
      • SERVICE ZONE
      • SEMA/AAPEX
      • SMALL BUSINESS
      • TIRE MAKERS
      • SPONSORED CONTENT
    • SHOP FLOOR
      • BALANCING
      • DEMOUNTING
      • SAFETY
      • TIRE REPAIR
      • TPMS
      • TRAINING
      • VEHICLE LIFTING
      • WHEEL TORQUE
    • Multimedia
      • VIDEOS
      • PHOTOS
      • PODCASTS
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
    • Data
      • DATA STORE
    • Resources
      • DIRECTORY
      • CLASSIFIEDS
    • ADVERTISE
    • DIGITAL EDITION
    • Awards
      • Tire Dealer Humanitarian Award