Point S posts strongest year ever

PORTLAND, Ore. — The alohas and luaus and leis will have to wait until next year, but that doesn't mean Point S Tire & Automotive Service USA isn't celebrating this year.

At least virtually.

The dealer cooperative navigated through a difficult spring 2020 — with sales lagging 40% last March versus 2019 — and emerged in December with the strongest year in its 38-year history, despite the nationwide challenges brought about by the COVID-19 pandemic.

Although it was unable to hold its usual in-person dealer conference this year — it had been scheduled to be held in Hawaii — Point S held a virtual two-day dealer meeting in early March and reported that, in 2020:

• Units sold increased 19%;
• Group sales revenue jumped 22%; and
• Points of sale rose by 27 locations.

"It was crazy how it unfolded," Point S Chief Operating Officer Clint Young said. "In some aspects, you count your blessings and thank your lucky stars … but a little bit of luck happens with some hard effort. We had a fantastic year. We're still pinching ourselves."

Buoyed by the addition of 10 locations in New England — former Vianor-branded stores in Massachusetts, New Hampshire, New York and Vermont acquired by Gills Point S from vendor partner Nokian Tyres P.L.C. — the Point S network has grown to 245 locations in 27 states, up from a dozen a year ago.

"At the end of day, the biggest strategic goal is we want to be in every state, coast to coast," CEO Walter Lybeck said. "And we're going to do everything in our power to get there as quickly as possible."

Much of the emphasis for growth, both last year and in the future, centers on bolstering the group's presence in the U.S. Heartland, around its distribution center in Memphis, which now supports 16 dealerships flying the Point S flag in the region. The Memphis warehouse — formerly Nussbaum Distributing Inc. — services customers within a 175-mile radius.

Clint Young, chief operating officer of Point S USA, said Point S was very intentional in its recruiting.

"We were able to expand the servicing to Point S-branded stores in the mid-south," he said. "[The new stores in the area] are obviously critical when we're trying to grow that market and that distribution center and make it a very profitable decision for the membership."

"We've bought on some stores that are farther out knowing that they're sizable enough that we can set them up with some direct programs and long carrier routes," Mr. Lybeck said.

"A lot of our focus remains there with recruiting," Mr. Young said, "and that was a big win for the team in 2020."

Eric Gill, chairman of the Point S board of directors, expanded his dealership to 30 locations with the acquisition of the 10 Vianor stores in New England.

Nokian continues to serve as the distributor for Mr. Gill's New England stores, which continue to perform well, he said.

Mr. Lybeck said the acquisition provides additional opportunity.

"Instead of being a warehouse-dependent distribution group, we've been able to develop this new model of not having a warehouse and still supplying product to our members," Mr. Lybeck said. "It's been really good for us. It has made us stretch about how to go to market and how we do business and adapt.

"One of the good thing about having a chairman that's very active in the market is he challenges you, and you have to change. This is another one of those challenges. It's good for us as a group and good for him."

Point S met a different challenge early last year, as the pandemic began to wreak havoc.

Fearing sales would plummet 15% to 20% for the year, the group decided to "double-down on business," according to Mr. Lybeck.

That meant focusing on getting members the best promotions they could, coupled with creative marketing in order to get customers into its stores, while cutting as many discretionary costs as possible.

"We attacked this pandemic, knowing that they were essential workers, knowing that our members need to keep their employees as well, so we wanted to keep them as busy as we could," Mr. Lybeck said.

"We had some hard decisions to make just like everybody else back in early spring last year, not knowing what was going to unfold," Mr. Young said. "I know a lot of the industry reeled back their staff quite a bit, furloughed people. We could have done that, but we didn't want to. The most important thing about our business is the people and we didn't do that."

Point S actually added staff in 2020. Almost every month from July through December set a sales record. And same-store sales growth, usually between 3% and 5%, increased 5%.

"Not just did we grow, we grew our existing membership as well," Mr. Lybeck said.

At the same time, the group continued to work on its initiatives, including its proprietary All-Trac platform, which is now active in 45 to 50 sites; its digital posters, which have been implemented fully across the network; and Point S TV, which continues to be a work in progress.

The digital posters helped to emphasize promotions across all locations.

"It made it very easy for us to get publications of marketing material out and ... not lost in the mail," Mr. Lybeck said. "It's really helped our marketing strategy at the store level."

The group expects 2021 will bring about its own set of challenges, from supply-chain difficulties to tariffs to pricing uncertainties.

Supply difficulty is particularly troubling, according to Mr. Lybeck. With factories continuing to ramp up to pre-pandemic capacity and ships backed up at ports, one vendor told him it would take six months for the situation to ease.

"I'm looking at a year of inconsistent supply, which means our team has to be on the ball with the ordering, keeping enough inventory on hand and on the ball with pricing," Mr. Lybeck said. "I also see significant volatility, not just because of supply issues, but because of tariffs and the ripple effect of pricing of all the brands, up and down the chain."

Ordering inventory is particularly precarious in the current economy.

"So we try to be fully in-stock as much as we can without overstocking," Mr. Lybeck said. "We try to balance that and watch pricing very carefully and take opportunities where we can."

He said he expects prices to increase between 6% and 10% this year, additional costs to the consumer.

"Our goal is to make sure we have some product in every category and size that's available, but we have yet to find lines to match across the board," he said. "You have to be flexible this year."

Basically 2021 means blocking and tackling, according to Mr. Young.

"We've got a lot of cool things happening," he said. "We're looking for a lot of intentional growth, and we need to make sure we are satisfying those decisions with execution top to bottom."

No matter what happens, Point S plans to resume its in-person trade show in 2022.

Members should hold on to their grass skirts: The event is set for Jan. 27-29 at the Waikiki Hilton in Hawaii.