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Tire Club planning expansion

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EL PASO, Texas—One year after opening its second warehouse club-style retail tire and wheel outlet, Tire Club Inc. is finalizing plans to add three locations in 2013, building up its business in Texas and expanding into Arizona and Nevada in the process.

The company, owned by Fernando Aguirre Sr., launched its “mega retail tire store” concept in 2009. Now it is moving to more than double in size after its first two locations, both located in El Paso, proved successful.

Annual sales at the two outlets hit $11 million, according to a Tire Club spokeswoman. The company's goal, she said, is to have at least two similar-sized locations up and running and a third site selected by year-end 2013.

“We're looking at locations that are strategically near major highways or roads,” she said, adding that while the company has no specific locations picked out, it has set its sights on Tucson, Ariz., for the first new store. Mr. Aguirre Sr. already operates two smaller tire dealerships in Tucson under the California Tire banner.

The spokeswoman attributed the mega store concept's success to the sheer size of locations and the inherent ability to stock and display far more products than a typical retailer.

Tire Club's first outlet has a 70,000-sq.-ft. showroom capable of housing around 30,000 wheels and 40,000 tires at any given time. The company's 95,000-sq.-ft. outlet in El Paso can store up to 40,000 wheels and 50,000 tires on the floor.

“We have literally walls and walls and racks of wheels and tires,...” she said. “Sometimes (customers) stay hours there trying to pick out what wheel they want, because we have so much variety that they can't make up their minds.”

By buying in large volumes, the company is able to pass on discounts on its products and a variety of other benefits to its customers, the spokeswoman said.

“We're offering free flat repair and free tire rotation for the life of the tires. We have a free road hazard warranty for our passenger and light truck and UHP tires,” the spokeswoman said.

In addition, Tire Club recently added products and services. In addition to the medium truck and ATV tires it has always sold, the firm began offering industrial and farm tires in July.

Also, the dealership has begun selling and installing suspension and leveling lift kits, the spokeswoman said.

“We're still trying to figure out if it's going to work out, and if it does then in the future (we'll) think of new things we can do,” she said.

While Mr. Aguirre Sr. had wholesale clubs like Sam's Club in mind when he launched the concept, the spokeswoman said the company is a retail business at its core.

“We still have a lot of customers that think it's a wholesale location or think they have to pay for a membership,” she said.

“I know it's a tire club, but the membership is free.”

The company has launched a billboard campaign, putting up signs along the freeway letting customers know “we're retailers, not wholesalers.” In addition, the company is finalizing its new website, www.tire-clubus.com, which includes a detailed description of its business model.

Tire Club carries most major tire brands, including Michelin, Pirelli, Toyo, Hankook and Goodyear, along with several Chinese tire brands. The company offers tire- and wheel-related services, including mounting, balancing and tire rotations and repairs.



To reach this reporter: wschertz@ crain.com; 330-865-6148.
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