More than 450 attendees participated in the 2015 Tire Factory Annual Meeting in Portland, Ore., announcing year-end results and addressing new business.
In its first year as a co-op, Tire Factory leadership announced $3.8 million in profits and volume bonus payouts.
Tire Factory CEO John Kreidel used the 31st annual meeting to address new business concerns, seeking to position the group better for the future.
Kreidel told Tire Review and members that the organization is in a “conscious transition.”
“I’ve watched a lot of consolidation in the grocery and office supplies industries,” said Kreidel. “Right now, there’s a lot of consolidation going on in the tire industry from the wholesale side and on the retail side.”
Kreidel and Tire Factory’s board of directors address members of the group, saying that the business is “growing, profitable and has a strong balance sheet,” but is losing buying power with manufacturers because of consolidation in the industry.
Kreidel and Eric Gill, chairman of Tire Factory and president of Nelson Tire Factory, announced that the group will pursue strategic solution to solve this, including tactics such as expansion, partnerships and adjusting its current business model.
In terms of expansion, Kreidel believes that “there’s an opportunity to expand especially in the Denver area.” The co-op, which owns a warehouse in Portland and one in Salt Lake City, currently leases warehouse space in Denver. In total, Tire Factory has 280,000 square feet of warehouse space across the three locations.
“We hope to expand in Denver like we did in Salt Lake City,” Kreidel said. “First, we leased the space and then grew, grew, grew until we bled. Then we purchased a building for the area.”
To fill out the Denver warehouse with tires, Tire Factory will also focus recruiting efforts in the area. Despite missing its goal of 25 new members in 2014, Tire Factory expects to add 25 new members in 2015.
Partnering with other buying groups across North America to increase the group’s buying power is also on the table for Tire Factory.
“There are several strong buying groups out there and as the market changes, we want to be proactive and talk to those group to see if we can share resources,” said Kreidel.
Currently, the co-op primarily does business with Tire Alliance Groupe. At the event, Yokohama announced a new brand, Tornante, for Tire Alliance Groupe members. The Tornante line will be exclusive to Tire Factory members on the West Coast and will be available in 30 sizes; T, H and V speed rated; and feature high mileage warranties.
Kreidel also mentioned adjusting the co-op’s current business model as a strategic move to capture business from non-members.
In addition to these tactics, Tire Factory made two hires over the course of the past year to enable Kreidel to “lead and work on strategy,” according to Kreidel. The group hired Todd Watson as its director of merchandising and Clint Young as its director of sales and business development.
“Todd comes from the grocery space, an industry that’s a ways ahead in terms of how they go to market. He’s bringing those disciplines from the grocery space to the tire business,” Kreidel said. “On the sales side, Clint has a background in commercial leasing for Enterprise. At Tire Factory, he’ll be in charge of unit sales, selling our technology and leading our sales force.”
The annual meeting concluded with elections for Tire Factory’s board and a meeting of members where annual results were announced.
