ROCHESTER, N.Y. (Oct. 31, 2016) — Add “wholesaler” to Mono Muffler Brake Inc.'s growing resume of business assets.
Monro's recently closed acquisition of Clark Tire & Auto Inc. in western North Carolina included four wholesale tire distribution centers — in Charlotte and Connover, N.C., Greenville, S.C., and Knoxville, Tenn. — operating under the Tires Now identity.
These centers' collective tire volume represents a bump of roughly 25 percent over Monro's tire purchases prior to the acquisition, according to Monro CEO John Van Heel in comments made to financial analysts during Monro's second-quarter earnings conference call, thus providing “significant opportunity to improve…our tire assortment and reduce tire costs.”
Mr. Van Heel noted that lowering the acquisition cost by just $1 per tire represents annual savings of nearly nearly $4 million.
The addition of these wholesale centers will allow Monro to improve distribution of tires to approximately 100 stores, or nearly 10 percent of its store network, while opening new wholesale sales opportunities for the Tires Now business.
“We believe that improving our ability to distribute tires to our own stores may represent a significant strategic advantage in the future,” Mr. Van Heel said. “This will strengthen our position as an independent tire dealer, reduce our reliance on existing distributors, and reduce our overall operating costs, which will further strengthen our business model.”
Monro's decision to complement its retail business model with wholesale follows by a few months its similar decision to retain the commercial and retreading business of McGee Auto Service & Tires of Lakeland, Fla.
These acquisitions and expansion into wholesale and commercial will broaden Monro's growth opportunities, Mr. Van Heel said, and make Monro a “better acquirer of competitors with integrated retail, commercial and wholesale businesses.