The past year in the North American retail tire business was characterized by acquisitions, as six of the Top 100 dealers in this year's ranking grew by buying out other dealerships or taking over selected outlets.
The acquisitions start at the top with No. 6 Monro Muffler Brake Inc., which added 11 Valley Forge Tire & Auto Centers in Pennsylvania and eight Craven Tire & Auto locations in Virginia in early summer to its Mr. Tire chain, boosting the business unit to 133 outlets.
Monro Muffler paid $16.7 million for the two chains, which together generated annual sales of about $22 million in 2006.
In March Whiteville, N.C.-based Black's Tire & Auto Service bought fellow North Carolina dealership Briggs and Sons Tire's 11 retail outlets, boosting the size of the dealership to 28 stores.
``We really want to be a leader in the Carolinas, service-wise, and we just think we needed that piece to do that,'' Rick Benton Jr., Black's vice president of sales and marketing, said at the time. He is the son of owners Ricky and Dianne Benton.
In Michigan, Northwest Tire & Service Inc. took ownership of five Friends Tire outlets from the bankruptcy court overseeing Friends Tire's Chapter 7 filing, giving Northwest 15 outlets throughout central Michigan. (See story on page 28 for more details.)
In Georgia, Nextire Group L.L.C. expanded via two acquistions and two store openings to 13 stores in the Atlanta area.
In Pennsylvania Jack Williams Tire added four Lehigh Tire outlets in January, expanding its store network to 27 locations.
The single largest deal was Active Tire & Auto Centre's acquisition of 28 Speedy Muffler locations in Toronto in May. Active since has franchised nine of the locations and is seeking franchisees to take over the other 19. (See separate story on page 22 for more details.)
In addition, TBC Corp.'s Big O Tires Inc. unit appears among the largest dealerships again after taking over 16 stores from franchisees, including 14 in Las Vegas in one transaction.
Neither Big O nor the former franchisees in Las Vegas, Steve Smith and Alan Wilson, returned calls seeking comment on the change of administration there.
All told, the top 108 dealerships-there was a 10-way tie for 99th-in this year's ranking grew by a net of 239 stores over the 12 months from August 2006 to August 2007.
Topping the growth list were Discount Tire Co. and TBC's Tire Kingdom Inc. unit, which added 32 and 28 stores, respectively.
Tire Kingdom, with 670 Tire Kingdom, NTB and Merchant's Tire stores, retained the title as No. 1 tire dealer by a three-store margin over Discount Tire, which also goes to market in California and Oregon as America's Tire. Les Schwab Tire Centers Inc. remained No. 3 with 333 stores (up 10) ahead of Kal Tire and Best-One Tire & Service.
In a statement published in the Sumitomo Corp. annual report, TBC President Larry Day said the company's retail group will expand its reach to more than 1,000 stores ``by building new stores and through the acquisition of strong regional chains.'' The report did not indicate the time table for this growth.
Combined with the 544 Big O franchise outlets operated in 21 states-mostly throughout the West-TBC already has a stake in more than 1,200 retail outlets in 38 states and is considered one of the largest wholesalers in North America with more than $1 billion in wholesale revenue.
In the Sumitomo report, Mr. Day said TBC sells about 26 million tires annually.
In terms of retail sales, Discount Tire was comfortably No. 1 at $2.3 billion. Perennial No. 2 in this category, Tire Kingdom, declined to divulge its sales for 2006, but they're believed to be measurably more than the $1.2 billion reported for 2005.
Les Schwab's retail sales grew more than 20 percent in 2006 to also hit $1.2 billion, and Schwab's average store sales of $3.67 million topped the list of dealerships with 10 or more stores. Discount Tire was close behind at $3.54 million.
The average sales for a retail outlet operated by a Top 100 dealership topped $2 million for the first time in 2006, hitting $2.2 million, according to data from 75 dealerships that provided sales information. That's about 10 percent higher than the average reported in 2005.
Eight of the dealerships in this year's Top 100 are affiliated with American Car Care Centers Inc., representing 579 outlets. Six dealerships with about 400 outlets are part of Tire Alliance Groupe (TAG), five dealerships with 134 outlets are aligned with Del-Nat Corp. and there are two independent Big O franchisees controlling 33 outlets.
New to the rankings this year are:
* Aaron Rents L.L.C., which opened 19 Rimco rent-to-own locations across the South, bringing the Rimco chain to 32 stores, including four franchised locations. Aaron's goal is to increase the number of franchised stores.
* Tiremax Corp., the Woodlands, Texas-based dealership now up to 15 stores after opening six in the past year. Tiremax also intends to pursue franchising, the company's owners say.
* Nextire Group of Atlanta added four outlets in the past year to now operate 13 stores;
* D&D Tire of Fernley, Nev., with 11 stores.
* Adirondack Tire Corp. of Colonie, N.Y., and City Tire Co. Inc. of Springfield, Mass., each of which added a store to hit 10.
In addition, Active Tire and Big O have returned to the rankings for the reasons stated earlier.
Dealerships from last year's ranking not among the top companies this year are:
* Big O Tires Las Vegas, Valley Forge Tire, Briggs and Sons Tire-all acquired in the past 12 months;
* Wood & Fullerton Inc., the Atlanta-area Goodyear dealership that closed one outlet; and
* Capital Tire Inc., the Toledo, Ohio, wholesale, retail and commercial tire dealership, which pared down its retail network to five stores from a dozen in the past 18 months. The retail stores do business as Tom's Tires. Capital Tire President Tom Geiger Jr. said the closings reflected the difficult retail environment in the northwest Ohio/southern Michigan area.
The average dealership size is 46 stores, down one from a year ago, while the median size is 23 stores, the same as last year.
Beyond the top 100, Tire Business data and surveys indicate there are more than 50 other dealerships throughout North America with seven stores or more.