American Tire Distributors Holdings (ATD) Inc.'s recent acquisition of Wholesale Tire Distributors Inc. (WTD) in Logan has added key distribution in the Rocky Mountain states and a new regional swath to its American Car Care Centers Inc. (ACCC) distribution network.
Terms of the deal were not disclosed. ATD has broadened its wholesale reach to about 2,700 customers in nine Rocky Mountain and Intermontane states and added ACCC distribution coverage in Utah, Idaho and Wyoming and parts of Nevada and Colorado, where there are 50 ACCC dealer outlets, including 10 operated by WTD itself.
ATD became an ACCC member distributor just shy of a year ago, taking over the southern Atlantic states territory of Target Tire when it purchased that wholesaler last September.
Along with the existing ACCC dealers in these regions, ATD also can sign up new dealers to the program. ATD has added some dealers in the former Target Tire territory of North and South Carolina, Georgia and southeastern Tennessee since taking over.
An ATD spokesman declined to say if more deals with other ACCC distributors are in the works, but he didn't rule anything out.
``Where we have the ACCC program, we're committed to the ACCC program, and if there's opportunities to increase our geography with ACCC, that is interesting to us,'' he told Tire Business.
WTD itself is a founding member of the ACCC marketing program.
While the deal with ATD includes the wholesaler's three distribution centers in Casper, Wyo., Boise, Idaho, and Salt Lake City, it excludes the company's 10 retail outlets in Wyoming and Utah.
Larry Nicholls, who founded WTD in 1976 as a retail company, said the retail stores will continue to operate as Plains Tire Co. in Wyoming (eight stores) and Discount Tire & Automotive in Utah (two stores). They will be organized under Logan-based parent Associated Tire Stores Inc. Mr. Nicholls said he expects to open two more Plains Tire outlets within a year.
Mr. Nicholls, who expanded the business into the wholesale arena in 1981, said he realized lately that he would have to grow that side of the business substantially to still be a force in the market.
``We decided that if we didn't grow to at least 10-if not more-(warehouses) that we probably were not going to be a viable factor in the distribution business,'' he said. ``That's where everything's moving to nowadays.''
That kind of growth presented many obstacles, not the least of which was low population density in the company's markets that would have difficulty supporting that many warehouses, he said. Mr. Nicholls said he considered Reno, Nev., but he would still need more area, and Las Vegas and Denver were not part of his ACCC market.
``You need to either fish or cut bait,'' he said he ultimately decided. ``So to open another six warehouses at a minimum took more commitment than I thought I was willing to give.''
WTD's wholesale business covers some 2,700 customers scattered over 326,000 square miles in nine states. Its 18 delivery vehicles accumulate 15,000 miles of driving weekly, the company said at its dealer meeting earlier this year.
Still, the deal will allow Mr. Nicholls to funnel his resources back to the retail side, which had been the foundation of the company in the first place. The stores are part of the ACCC program, and Mr. Nicholls has a long-term supply arrangement with ATD. Christie Stock, his daughter and vice president of WTD who had managed the company's ACCC program, will join ATD.
Mr. Nicholls added that ATD will bring many benefits to his dealer customers and employees. ATD will add Bridgestone and Goodyear tire brands to the mix as well as wheels and equipment, which Wholesale Tire Distributors had not offered. Also, his roughly 70 employees have much more opportunity for advancement within ATD than they had under WTD, Mr. Nicholls said.
``ACCC dealers have got a totally committed, viable successor company,'' he said.
Indeed, the ATD spokesman said the larger company is able to handle, for example, the population-density challenge because it deals with similar scenarios in Nebraska, Iowa and South Dakota.
``With our investment in our systems and our logistics, we are very well positioned to make our routes efficient and really deliver that high level of customer service that we're known for in the market,'' he said.
The spokesman said it's too early to know whether ATD will add warehouses in WTD's region, but he pointed out ATD's recent efforts to grow, especially in Texas where ATD expanded and relocated several centers.
``We really make a commitment to a market,'' he added.
ATD did not say what WTD's annual sales are.
Both Mr. Nicholls and the ATD spokesman said a particular strength of WTD was its strong, connected network of dealers.
Mr. Nicholls said ATD made a commitment to continue his company's practices, which he will notice firsthand as a customer of the network.
``So we have high expectations that all of those commitments (are) going to remain in place,'' he said.
The ATD spokesman said the distributor plans to do just that. The spokesman said ATD does not have any specific goals for adding new dealers to the ACCC program in those regions. ``What (WTD) really emphasized is quality, not quantity, and I think that's important for us to continue in that mindset.''