MEMPHIS — Point S Tire & Automotive Service, the marketing group with the majority of its affiliated locations in the West Coast-Rocky Mountains region, has acquired the assets of Nussbaum Distributing Inc. in Memphis, expanding its presence in the U.S. Heartland.
The acquisition is an outgrowth of a distribution deal the two companies had signed in late 2017 that Point S at the time said would be a catalyst to adding 50 stores to its network.
The deal gives Point S control over warehouses in the Memphis area exceeding 100,000 square feet, allowing it to service dealers in Arkansas, Kentucky, Louisiana, Mississippi , Missouri and Tennessee.
"This is exciting news for all our members," Point S USA CEO Walter Lybeck said. "Our growing footprint puts a demand on having the right tires in stock and delivered when our dealers need them. This investment shows our commitment to our existing members and future prospects in the market and to our vendor partners who have supported us so well over the years."
Eighteen employees have joined Point S as part of the transaction, and they will maintain their current responsibilities. They will join five other Point S employees in Memphis.
Mr. Lybeck said the region is attractive because of a strong presence of independent tire dealers.
"This deal was considered as a possibility in our long-term plan as we entered the market," he said. "The cards aligned this summer, and we took advantage of the opportunity."
By taking over this distribution business, Point S said it now controls distribution routes and product offerings.
"We now have a full lineup of tires to offer to potential members as well as ancillary products. Wholesale operations will take advantage of our group's programs," Mr. Lybeck said.
According to Point S, this acquisition, along with an 88,000-sq.-ft. expansion of its Salt Lake City warehouse that was completed in June, gives the marketing group more than 450,000 square feet of warehouse space to accommodate deliveries in the 21 states and surrounding territory where Point S dealers are located.
In addition to Memphis and Salt Lake City, Point S USA operates distribution centers in Portland and Denver.
There are around 220 Point S-affiliated points of sale across the U.S., including 13 new stores added in 2019 with others in the pipeline. Mr. Lybeck called it a "good recruiting year."
"Our growth model is strategic," Point S USA Chief Operating Officer Clint Young said. "We've built our success in adding members that are focused on tire sales and have an appreciation for joining a group that values their independence."
Mr. Lybeck said the acquisition helps members everywhere because it brings with it improved distribution and product availability, "simpler ordering as we integrate and with increasing volumes, we can stock deeper," he said.
Point S said its network has registered 6% sales growth this year. With "some strong" consumer promotions later this year, Mr. Lybeck said the group expects "to close the year on a high note.
"We define expansion by the growth of our existing member base," Mr. Lybeck said. "It's their increase in sales that defines how we expand and defines success as a member-owned cooperative.
"It all boils down to delivering upon our promise to our membership of having tires their customers expect at a great value. This philosophy has allowed Point S double-digit growth for the last two years, and continued growth in units this year."