Tire Factory rapid expansion good for independents
New Tire Factory chief executive Walter Lybeck has ambitious plans for the successful cooperative, including a 100-store expansion over the next two years.
Tire Factory is based in Portland, Oregon, and was formed in 1983. In 2015 it joined Point S — a group of 3700 independent tire stores worldwide — and is in the process of converting its Tire Factory stores to Point S Tire and Auto Service. It currently has 150 members, 200 stores and a 12-member board to help drive the company.
Lybeck was formerly Tire Factory’s chief financial officer and has been its interim chief executive since August 2015, when John Kreidel left the company. The Tire Factory board conducted a lengthy nationwide search before unanimously selecting Lybeck, saying he had “the right blend of experience, operational, financial skills and cultural fit” for the role.
A plan for rapid growth
Lybeck’s plan is to turn Tire Factory’s current 200 stores to 300 by 2017, growing regional independent dealer network partnerships and recruiting single stores and smaller multi-store groups in areas with current and effective distribution.
“It’s definitely an aggressive growth plan, but we will be strategic about how we grow,” Lybeck told Traction News. “Our most important growth strategy is to maximize the in-network purchases of our members. Our goal is to become the best supplier to the independent (dealer) with great customer service, great in-stock levels, great marketing programs and with competitive pricing. I’m passionate about exceeding our members’ expectations.”
Although they are transitioning to the Point S brand, each store will retain its independence and has a unique look and feel. There are obviously consistencies across each retailer, such as quality standards, training, marketing and a common warranty, as well as some signage. However, the emphasis remains on independent, neighborhood stores with their own local flavor.
Growing externally is also critical to Lybeck’s plans as Tire Factory expands its Point S brand. The company intends to expand eastward and is looking at increasing its depth in Colorado, Nebraska, Kansas, Texas, Oklahoma, and the Dakotas. It will also consider opportunities on the east coast if they arise.
Between them, the 12 board members own 40 tire stores, which Lybeck calls one of the business’s “greatest advantages.” Having members actively involved in the management of the company, he said, was like having “experienced consultants helping to guide us.”
The future of independent tire stores
Lybeck says he believes the tire industry is going through the same experience the U.S. hardware industry did more than a decade ago, with independent retailers disappearing and bigger brands consolidating. In the face of such fragmentation he says there is a strong need for independent branded tire groups.
“We believe it’s important that independents survive, and our vision and our cooperative is about the long-term success of independents,” he said. “It’s not that we make profit and grow and return the most money for Tire Factory, it’s that independents succeed.”
Lybeck’s five-year vision for Tire Factory is simple: “We will be recognized as the very best solution for the independent tire dealer to ensure a great future and to continue long-term profitability for their business,” he said.
“Like today, in 2021 I’d report to you that we are a strong, profitable, growing network of independents helping independents survive in an increasingly competitive market. We will just be a lot bigger.”
The right appointment
One thing Lybeck certainly has is enthusiasm for the company and a love of the industry. “I work here because I love the independent tire store — they’re out there on their own, trying to make a living and support their families and their employees’ families,” he said.
“Since joining the company, I’ve been excited about Tire Factory’s business model, the quality of its members, employees, and financial performance, but most of all with our alliance with Point S International. I am excited to grow this co-op profitably and help the independent tire stores’ continued success.”
Lybeck has been with the company for five years. That’s experience he says sets him in great stead for Tire Factory’s ambitious growth plans.
“I understand our members very well, I have a rapport with them and I understand what it means to work for a member-owned company. You have to understand that they own this company and you are employed by them, but you also need to have vision and direction and keep the company going straight. My job is to inspire, challenge the status quo, listen to members and execute a strategy.”