It has been another year where M&Amergers and acquisitionsplayed a major role in the development of the retail tire industry in the U.S. over the past dozen months, with one leading player, Pep Boys - Manny, Moe & Jack, the subject of a weeks-long billion-dollar bidding war and another, Monro Muffler Brake Inc., continuing to absorb well-known independent retailers.
At the same time, the leading tire retailer, Discount Tire/America's Tire of Scottsdale, Ariz., added 18 greenfield stores to its network, widening its lead over No. 2 TBC Retail Group, whose network shrank by five stores as the company continues to consolidate and upgrade its various retail brands.
Discount Tire's growthto 924 stores in 31 statescomes on top of 13 stores added in 2014-15, 28 in 2013-14 and 25 in 2012-13. Continuing at that pace would put the dealership at the 1,000-store mark in three to four years.
While TBC Retail's overall store count remained essentially on par with a year ago, the Palm Beach Gardens, Fla.-based group realigned its brands to an extent, opting to limit the use of its Tire Kingdom brand to Florida, the Merchant's Tire & Auto Service Centers retail identity in Maryland, North Carolina, Virginia and Washington, D.C., and favor the NTB Tire & Service Centers brand most everywhere else.
TBC's retail presence extends further through its Big O Tires L.L.C. and Midas International/Speedee Oil Change & Auto Service franchise brands, with 389 and 1,176 outlets, respectively.
TBC is marking the 60th anniversary this year of the founding of Cordovan Associates, a purchasing group of tire retailers that was the predecessor of today's TBC.
From its founding in 1956 as Cordovan Associates, established in Dayton, Ohio, the group changed its name in 1972 to Tire & Battery Corp. and in 1981 went public under the name TBC.
As we reflect on the last 60 years, it's apparent that the TBC story is truly one of hard work, adjusting to meet industry trends, exceeding customer expectations and growth, said TBC President, CEO and Chairman Erik Olsen.
TBC is considered the largest vertically integrated marketer of tires for the North American automotive replacement marketwith more than 3,200 franchised and company-operated tire and automotive service centers, nine proprietary tire brands and more than 50 wholesale distribution centers.
Collectively, TBC claims this equates to nearly 10 percent of all aftermarket tires sold in North America.
No. 3 Monro Muffler's cache of acquisitions in the past year include two companies previously in the Tire Business Top 100Clark Tire & Auto Inc. of Hickory, N.C., (26 stores) and McGee Auto Service & Tires of Lakeland, Fla. (30 stores).
Monro's net gain over the past year was 55 stores, leaving the Rochester, N.Y.-based company with 576 tire-centric retail stores to go with 515 Monro-badged auto service-centric locations. Monro also controls the Car-X Tire & Auto franchise system, which has 136 outlets in operation, predominantly throughout the upper Midwest/ Great Lakes states.
No. 4 Les Schwab Tire Centers Inc. added 13 stores in the past year, including five new-look stores in Southern California, and is scouting locations both within its existing footprint and in new territories outside of its traditional West Coast/ Rocky Mountains domain.
No. 5 Mavis Discount Tire added six locations to its network a year after nearly doubling in size with its acquisition of Somerset Tire Service.
Pep Boys is ranked No. 6 with 240 tire-centric Service & Tire Centers retail storesup six vs. 2015to go with 565 more traditional Pep Boys locations.
New owner Icahn Enterprises L.P.which paid $1.03 billion for Pep Boys after outbidding Bridgestone Americas over a several-week tug-of-war in late 2015has stated it intends to integrate its existing Auto Plus auto parts stores with Pep Boys but to date has yet to disclose more detailed plans.
Among the companies new to the rankings this year is 4 Wheel Parts, the retail arm of Transamerican Auto Parts Co., the Compton, Calif.-based manufacturing, wholesaling and retailing group focused on the off-road sector.
With 75 retail stores, 4 Wheel Parts is ranked at No. 17, but even before the dealership could make its debut on the Tire Business Top 100, however, it too was swept up in the M&A wave.
Off-road vehicle maker Polaris Industries Inc. struck a deal in early October to buy privately held Trans-american for $665 million. The transaction is subject to regulatory approval and other customary closing conditions and is expected to close by year-end 2016, the companies said. (See a more detailed story on page 3 in this issue.)
4 Wheel Parts, which operates 75 retail stores in the U.S. and Canada, accounted for 61 percent of Trans-american's $740 million in sales for the year ended Sept. 30. The retail stores also handle online transactions as well, which helps explain their $6 million average annual sales volume.
Some dealerships worth mentioning for their organic growth:
c Belle Tire Distributors Inc.six new stores, including the dealership's first four in Indiana, raising the total to 97;
c Town Fair Tire Centersseven new stores, including the East Haven, Conn.-based dealership's first in Vermont, in Rutland, and one acquistion, that of Sam Wibberly Tire in Day-ville, Conn. Town Fair's 94 stores earn it the No. 15 ranking on the Top 100.
c Bob Sumerel Tire & Auto Serviceexpanded its reach to 34 locations in part by adding responsibility for five AAA Tire & Auto Service locations in the Dayton and Toledo, Ohio, areas. AAA Allied Group Inc., a Cincinnati-based travel services company, bought the retail business of Bob Sumerel Tire in 2009.
Other dealerships debuting in the Top 100 include:
c Southern Tire Mart of Columbia, Miss. The nation's largest independent commercial dealer has been adding retail services gradually to its network of commercial locations to the point where it now has 29 such stores.
c Rental Concepts L.L.C. of Jacksonville, Ark. This RNR Tire Express & Custom Wheel franchisee debuts with 18 locations. (See a related RNR story on page 31.)
c Big O Tires/California of San Francisco. This franchise partnership of Chris Monteverde, Abe Matar and Savendra Dutt operates 17 Big O stores in northern California, including one opened in San Jose in late September. (See a related Big O story on page 13.)
c Koldenhoven Enterprises of Colorado Springs, Colo. Another Big O franchiseeunder the leadership of multiple Big O Tires award winner Scott Koldenhovenwith 13 stores in Colorado and New Mexico.
c Gill's Point S of The Dalles, Ore. This dealership, under the direction of Eric Gill, has grown to 14 outlets in Oregon and converted them all in the past year to the Point S Tire & Auto Service flag, the retail identity that Tire Factory Group has adopted.
c Big O Tires/Arizona of Phoenix. This dealership, under owner Tony Williams, has grown to a dozen Big O locations throughout Arizona.
c Western Automotive Group of Las Vegas. This newly formed dealership, owned by Mark Rhee, acquired 11 Big O stores in the Las Vegas area from TBC Corp. and opened a 12th location just recently.
The Top 100 includes 13 dealerships, with 254 outlets collectively, that are franchisees: seven that fly the Big O Tires flag, three that are Car-X Tire affiliates, three that belong to the RNR Tire rent-to-own network, and two that are aligned with Midas (including one, Leeds West Group, that operates both Big O and Midas outlets).
By franchise identity, the dealership groups are:
c Big OLeeds West Group, 56 locations (some are Midas/ Spee-dee); Golden West Tire Centers, 26 locations; Big O Tires/California, 17 locations; MFA Petroleum Co., 16 outlets; Koldenhoven Enterprises (formerly BBAC Partnership Group), 13 stores; Big O Tires/Arizona, 12 stores; and Western Automotive Group, 12 stores.
c Car-X TireGorrepati Service Systems Inc., 24 locations; Brex Inc., 18 locations; and NONA Inc., 16 locations.
c Midas/SpeedeeAuto Systems Experts Inc., 39 locations; Leeds West Group.
c RNRRental Concepts L.L.C., 18 locations; RIMS USA L.L.C., 16 locations; Gulf Coast L&P, 12 locations; RNR Tire Express (Larry Sutton), seven locations.
c MFA Petroleum, Big O Tire's franchisee in Missouri, also operates nine Jiffy Lube stores in addition to its 16 Big O stores in Arkansas, Missouri and Oklahoma.
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