Tire Discounters to Double in Size in 5 Years
This entry was posted on Jul 21, 2017 by Kathy McCarron, TireBusiness.
TireBusiness Reporter Kathy McCarron interviewed Tire Discounters President Jamie Ward, discussing the agressive growth strategy and the challenges of expanding. The article "Tire Discounters to Double in Size in 5 Years", is featured in TireBusiness, July 2017.
CINCINNATI — Tire Discounters Inc. plans to double its store network in the coming five years and intends to achieve that, in part, by acquiring small dealerships seeking to exit the business.
"We want to partner with other family-owned and -operated businesses with a similar, customer-first philosophy as we expand our business," Tire Discounters President Jamie Ward said. "We want everyone to know that there are other choices than selling to some big faceless corporation.
"We know that not everyone has a solid succession plan like we do, and we want family tire and service retailers considering options to sell to know they can trust us to take care of their customers and their hard-earned reputations."
Tire Discounters, the 10th largest independent retail tire dealership in the U.S., based on Tire Business', rankings of company-owned outlets, operates 106 stores in Ohio, Kentucky, Indiana, Tennessee and Georgia. That network could exceed 200 stores by 2022, if the firm's expansion plans play out as envisioned.
Tire Discounters recently announced plans to open 10 stores in the coming months, including its first in Alabama with the opening of a store in Huntsville. The plan also calls for three new stores each in Nashville and Chattanooga, Tenn.; one store each in Louisville and Lexington, Ky.; and one location in the greater Cincinnati area, where it also is remodeling five existing stores.
"We had grown from a single, one-bay tire store to approximately 50 stores on a basic organic growth of two to three stores per year," Mr. Ward told Tire Business.
"In that, we ran into some markets, as we grew to that 50-store number, where we actually acquired a couple of small, mom-and-pop operators — just single store units."
Then, several years ago, the dealership pursued a faster expansion track at a rate of 10 to 15 store openings a year.
"It literally took our company from 50 stores to 106 stores," Mr. Ward said.
"Since we've predominantly been an organic-only growth company, we're now deciding we can do more at 106 stores. We can look at additional opportunities beyond the new greenfield expansion that we've been currently doing."
Now the dealership is putting the word out that it would be willing to consider buying existing small dealerships.
"We are open to looking at any opportunity, whether or not it's in our immediate footprint or not. We're looking to expand our footprint pretty aggressively," Mr. Ward said.
"We doubled in five years from 50 to 100 stores. We'd like to at least do that organically for the next five. So we're looking to take our store count to over 200 five years from today. And that means we need to grow at approximately 20 to 25 stores per year, which we can do. We have the right infrastructure in place and everything else, so that is part of our strategy," Mr. Ward said.
Small dealer identity
"At the same time we are also going into new markets and new territories where there are a lot of really great small, mom-and-pop dealerships — which we have a ton of respect for since we are a mom-and-pop dealer," he said.
He explained that, while store-count-wise, Tire Discounters could hardly be considered "small," the family-owned dealership has maintained its small-dealership philosophy.
"Some people refer to us as a big tire store, but quite frankly we still look at ourselves as small, little guys against the big competitors, and that's how we go to business every day," said Mr. Ward, a 20-year company veteran who was promoted to president and COO in February 2016.
"There are a lot of great similarities with us, and some of the mom-and-pop operators out there — where they focus on the customer, we focus on the customer; they care about their employees and try to improve to make their lives better; we care about our employees and try to make their lives better," he said.
"We want to, instead of going in and possibly interrupting their business model, to maybe partner with them. We really care about the mom-and-pop operators. We have a lot of respect for those folks. They are hard working, just like us. They know how to win against the big players."
"Over the last couple of years we've had people reach out to us and let us know that if we ever come to their market that they'd like to talk. So it only makes sense for us to continue to grow to achieve our goals, to accelerate that," Mr. Ward said.
He explained the expansion goals are driven by the dealership's success.
"We're focused on continuous improvement. The benefit of being successful is having the ability to expand. We are very encouraged that we can go into a market with the top competitors in the nation that have a tendency to squeeze out the mom-and-pops. We do very well against the big players," he claimed.
"That doesn't come easy, but our success allows us the confidence. It gives us the confidence to go really anywhere against any competitor and do very well. That's basically driving it."
He also attributed that corporate confidence to the firm's employees and management team.
"It's the quality of people that are touching and greeting and helping and solving the needs of our customers that make the difference. And knowing that we have the best team in the industry — how does that not give you confidence or encouragement to go into new markets? Our team desperately wants to win. We have a winning culture, and it's exciting for us."
"We're willing to outwork the competition and we try to do things right when no one's looking.... We know we're not perfect," he said, adding, "but knowing those issues, having an open culture where we can talk about problems allows us that continuous improvement cycle, and that's really, really important for our culture. And those little things that we do really separate us from the competition."
He noted that the dealership is not interested in franchising its business model because "we want to control our brand. We want to control our quality of customer service, and we want to control how we go to business."
"Our brick-and-mortar is our focus, it's our business model, it's touching that consumer. Online sales are incomplete sales. It's an incomplete product when you buy tires online. So there is a demand or a need for retail stores. That's not going to go away anytime, I see, in the future," Mr. Ward said.
One of the main challenges of expanding into new territories is that the dealership is "starting to bump into some of our friends (other regional tire dealerships)," Mr. Ward said.
"That's where our business model, really the entire industry, is going to start changing quite a bit in the next several years. A lot of the mom-and-pop operators like ourselves have gotten to where we've grown so large that we're starting to rub elbows with some of our friends out there that are kind of the same size or a bit smaller than us.
"Those are going to be some interesting days ahead for us, and we want to be the leader of all that as far as opportunities as we grow."
In addition to building and remodeling stores, the dealership is developing customized technologies to improve customer relationship management (CRM), point-of-sale transactions and operations.
"We're really spending a lot of money right now, a lot of focus, a lot of attention on trying to really develop some new technology and incorporate some new technology into our operations so that we can be the best tire dealer in the United States," Mr. Ward said.