ROCHESTER, N.Y. (May 23, 2006) — Monro Muffler Brake Inc. will convert its recently acquired ProCare Automotive stores in Ohio and Pennsylvania to Monro Muffler and Mr. Tire identities in the coming months.
Monro, which bought 75 ProCare outlets in April out of Chapter 11 bankruptcy protection, will convert 44 stores to the Monro format and 31 larger stores—those with seven or eight service bays—to the Mr. Tire format, according to Robert G. Gross, president and CEO, speaking to financial analysts today on a conference call.
“We thought it was better to invest to build these brands up,” Mr. Gross said, “than in repairing damage (to ProCare's image).”
The outlets slated to become Mr. Tire stores are primarily in the Cleveland and Columbus, Ohio, and Pittsburgh metro areas, Mr. Gross said.
“Originally we thought we'd keep the ProCare name active for up to to three years,” he said. But since then Monro has determined news of the bankruptucy filing—ProCare notified all its customers of its bankruptcy filing—and a slackening of business during the final few months before the filing tarnished the ProCare name sufficiently to warrant the change.
Ironically, Mr. Gross added, these factors appear also to have helped Monro obtain ProCare for an “attractive price” and kept some other potential buyers away. As a result, Monro has some extra capital available to invest in the conversion, he said.
Monro's $14.7 million acquisition of ProCare equates to about $130,000 per service bay, Mr. Gross said, vs. $150,000 or more for a greenfield site. In addition, the acquired network has a built-in customer base and a trained workforce, he noted.
Prior to the bankruptcy filing, the ProCare stores averaged about $625,000 in annual sales, Mr. Gross said, but this fell to less than $500,000 during the transition period. By contrast, the average of a Monro store is $525,000 and $1.1 million to $1.2 million for a tire-format store.