Monro Muffler Brake Inc., owner of the Mr. Tire chain, aims to become a major tire retailer through acquisitions of other tire dealerships. Joseph Tomarchio Jr., executive vice president of store operations for the company's Monro Tire Group, knows about acquisitions firsthand.
As founder of Mr. Tire with his brother Fred in 1970, the company grew into a 36-outlet chain in Maryland and Virginia until a major auto dealership chain bought a majority interest in the tire dealership in 1998.
When the car dealership chain sold the tire business to Monro in 2004, Mr. Tomarchio was hired to oversee and expand the tire stores.
``I understand the business from the ground up,'' he said, noting he had done every job from changing tires to doing the bank deposits to cleaning windows when he ran his own dealership. ``I never ask an associate to do something I haven't done myself.''
When he and Fred started in the tire business, they had one store in west Baltimore where the tire mounting was done outside. ``We did everything. We felt if we were on a level playing field, we could outperform everyone else,'' Joe Tomarchio told Tire Business. Unlike the capital Monro garners from trading stock, he proudly admits his company ``ran on O.P.M.-Other People's Money.'' Hard work and tenacity helped build the dealership, too.
He said the dealership prided itself on operating ``out-of-the-box and against the tide'' in the 1970s-such as being one of the first in its market to install European tire changing machines, offer a promise of damage-free mounting of aluminum wheels and add Sunday hours.
As a source of motivation and inspiration, one of the Mr. Tire stores displayed a ``graveyard'' with the names of tire dealerships that went out of business in its market. Mr. Tomarchio proudly said that when Mr. Tire was sold, the graveyard included 68 tire businesses that had been acquired or closed during the past 33 years in the markets the dealership served. Political correctness prompted Monro to bury the graveyard, he added.
All but 28 of Monro's 115 tire stores operate as Mr. Tire. Monro also has 586 Monro Muffler Brake & Service shops throughout its 17-state territory.
Tires were a natural progression for Monro when it set out six years ago to expand its sales, according to Mr. Tomarchio. ``Mr. Tire gave it a good base to pattern its tire growth off of.''
In addition to developing the Mr. Tire chain, he assists in getting the Monro Muffler service stores more involved in the tire business.
The company plans to continue growing both store formats. ``We pull the best pages out of each others' play books,'' he said.
Since his humble beginnings, Mr. Tomarchio has seen big changes in the tire industry. Probably the most dramatic is the amount of tire size offerings. ``Size proliferation was nowhere near where it is today,'' he said. ``Today size proliferation is totally off the wall.''
However, this phenomenon is both good and bad for tire dealers, he added. It creates added inventory and a need for more capital. But those factors also force big box competitors, which he calls ``marginal players,'' out of the tire business. Since they focus on inventory-per-foot ratios, they won't devote floor space to stock all the various tire sizes.
``This is actually a benefit to us who are really focused on the tire business.''
While the Monro chain tries to dominate the markets in which it operates, Mr. Tomarchio concedes the big chains won't eliminate the small dealerships. ``The guy with one or two stores will always be there because he has a one-on-one with his clientele. It's the guy in the middle (who is endangered) because he is too big to think small and too small to think big.''
The mid-sized dealerships lack the distribution, marketing and bankroll power of large chains like Monro, he added.