8 minute read
‘Retail is detail’
from MTD - July 2021
by EndeavorBusinessMedia-VehicleRepairGroup
“There are over 100,000 repair shops in the U.S., so we view store growth opportunities as essentially limitless,” says Sun Tire & Auto Service CEO Frank Kneller. “Our focus is on nding high-quality businesses that are trusted within their communities.”
Kneller says Sun Auto Tire & Service’s platform “is not restricted” to the western part of the U.S. “You will see us continue to expand into new territory throughout the U.S. over time.” (Sun was previously known as GB Auto Service Inc.)
Under the Sun
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By Mike Manges
MTD: Will Sun Auto continue to target a mix of auto service chains and independent tire dealerships or will the company’s future mix be more tire dealership-heavy?
Kneller: Our process is less about partnering with a company based on service or tire mix and more focused on the overall business fundamentals, including store format, market dynamics and the strength of the management team.
MTD: How challenging has it been to integrate tire sales and service into Sun’s auto service chain acquisitions?
Kneller: While all transitions are hard work, our team has developed a playbook to integrate acquired businesses, which includes considering the right service mix for each store and ensuring we can provide a complete repair solution for customers.
In the case of Sun Devil, that business was built as a high-velocity service model and has unparalleled brand recognition in its markets, so we view tires as a more opportunistic addition. (Editor’s note: GB Auto Service acquired Sun Devil Auto Service in July 2020.)
In other service acquisitions, we’ve been quicker to implement tires as a way to drive incremental tra c and in many cases, that is a natural transition as many of our customer managers have had experience running tire-forward stores in the past.
GB Auto Service Inc., which last month rebranded as Sun Auto Tire & Service Inc., has been busy since the 2020 edition of the MTD 100 was published. is past October, the company acquired Tate Boys Tire & Service, a seven-location chain based in Oklahoma. e following month, it acquired Reliable Automotive, which is based in Texas.
In December, the company bought three ServiceONE Automotive stores in the Houston, Texas, area. And in March 2021, it acquired Goodguys Tires & Auto Repair, an eight-store dealership based in Fresno, Calif.
CEO Frank Kneller discusses what’s next for Sun Auto & Tire Service, which has 200 total stores, during this interview.
He also explains why he is “encouraged by the resiliency” of the retail tire market and why Sun Auto views its own growth potential as “essentially limitless.”
MTD: GB Auto Service, now known as Sun Auto Tire & Service, has made a number of acquisitions since last summer — all west of the Mississippi. Will the western part of the U.S. continue to be an area of focus? Does the company have plans to enter new areas?
Kneller: Our goal is to continue our growth strategy by engaging with owners of great companies who are ready to sell, but are also looking for a respectful home for both their customers and employees to transition to.
While it is true that our current acquisitions have all been in the Sun Belt and western states, our platform is not restricted to these geographies and you will see us continue to expand into new territory throughout the U.S. over time.
MTD: Does Sun Auto have a store count target?
Kneller: ere are over 100,000 repair shops in the U.S., so we view store growth opportunities as essentially limitless. Our focus is on nding highquality businesses that are trusted within their communities and t our model and we’re complementing mergers and acquisitions with an active green eld strategy where we see opportunities to build new locations in growing markets.
MTD: What’s your assessment of the retail tire market?
Kneller: We’ve been encouraged by the resiliency of the tire market. We think that is a validation of the non-discretionary and essential nature of the services that we o er. ■
TIRE DISCOUNTERS NEARS 145 STORES, LAUNCHES FRANCHISE PROGRAM
By Mike Manges
Tire Discounters Inc. continues to expand its footprint. Earlier this year, the Cincinnati, Ohiobased company opened its 15th Columbus, Ohio-market store. Georgia has been another recent growth area for the dealership.
Tire Discounters — which was founded in 1976 by Chip Wood, MTD’s 2020 Tire Dealer of the Year Award recipient — also operates in Kentucky, Indiana, Tennessee and Alabama.
In this interview, Jamie Ward, the dealership’s president and CEO, discusses what’s next for the family-owned company, including its franchise program, which MTD rst reported on last year. e program is designed to appeal to smaller independent tire dealers “who don’t want to sell their business, but can’t spend the money on all of the initiatives needed to grow,” Ward told MTD at the time. “ ey can become part of our organization as a conversion of their current format.
MTD: Tire Discounters has consistently pushed into new markets and has grown its footprint to more than 140 locations across six states. Does the company have a store count goal in mind within its existing footprint?
Ward: We put no limits on our growth. We are continually adding new stores within our footprint. Most recent examples
“We feel there is a lot of pent-up demand for both tires and service repairs,” says Jamie Ward, president and CEO of Cincinnati, Ohio-based Tire Discounters Inc.
include Columbus, Ohio; Indianapolis, Ind.; and Atlanta, Ga. We have no plans on slowing down. better compete with the larger corporations and expect to approve some dealerships that will be going through our careful selection process.
MTD: In the September 2020 issue of MTD, Chip Wood said, ‘It would be pretty cool to become a national brand versus a regional retailer.’ Do you have plans to take the Tire Discounters chain national?
Ward: Although our current organic growth is heavily concentrated in Georgia and surrounding states, we are speaking to many family-owned, independent dealerships that are exploring options to strategically partner with us in various states around the country.
MTD: On that note, can you bring us up to speed on Tire Discounters’ new franchise program and its development? When will the program formally launch?
Ward: The Tire Discounters franchise program is just now launching and there has been a lot of interest. e program extends our best-in-class practices, expertise and support to the independent tire dealer.
We are currently talking to several owner-operators who could use our help to
MTD: How do you view the current state of the retail tire market?
Ward: We feel there is a lot of pent-up demand for both tires and service repairs, so we look forward to aggressively competing for those customers. Although the outlook looks promising for many independent tire dealers, there are real threats of inflation that will be impacting the acquisition prices of goods and services. “We are currently Although the best dealers will talking to several resist the temptation to discount owner-operators who could use our help to better tire prices when customer shopping naturally intensi es, we will compete with the unfortunately see some bigger larger corporations,” says Ward. Tire Discounters corporate chains reduce prices to combat the competitive pressure. is launching its This margin compression franchise program, could have a grave impact on which was rst announced in 2020. all businesses on the heels of a tumultuous year and not every business can compete as e ectively as we can. We look forward to strategically navigating demand and continuing to serve our customers with excellence. ■
Belle Tire has added more than 30 stores in Indiana over the last three years and recently entered the greater Chicago, Ill., market. “We want to continue to grow in contiguous markets, so Chicagoland was a natural t,” says Don Barnes III, the dealership’s president.
BELLE TIRE BUILDS PRESENCE IN NEW MARKETS, INCLUDING CHICAGO
By Mike Manges
Allen Park, Mich.-based Belle Tire Distributors Inc. will celebrate its 100th anniversary next year.
Between now and then, however, the dealership is focused on establishing a foothold in the Chicago, Ill., market, which it recently entered, while maintaining momentum in central and northern Indiana, where it has added more than 30 stores over the last several years.
In this interview, Belle Tire President Don Barnes III answers the question, “Why Chicago?”
He also discusses the key to the dealership’s rapid growth in Indiana, if Belle Tire plans to move into other markets and why he is “bullish on our industry” as demand for tires and auto service increases.
MTD: It’s been an extremely busy year for Belle Tire. e company is continuing to build its presence in the Indianapolis market, which it entered a couple of years ago. And more recently, Belle Tire entered the Chicago market, which is brand new territory for the dealership. Can you bring us up to speed on what’s happening in Chicago and why that’s an attractive market for the company?
Barnes: We recently broke ground in Chicagoland. We’re really excited to enter our fourth state, Illinois, and (are) really excited to start having a presence in the Chicagoland market. (Editor’s note: Belle also has a presence in Michigan and Ohio.)
We see the Chicagoland market as a very fragmented market with really no dominant player and we’re excited to bring our model: tires and service ... (and) really focusing on the customer experience to deliver a top-level experience for all of our customers and create more opportunities and create more jobs in the Chicagoland area.
