Fresh off striking a deal to buy 30 Bob Sumerel Tire retail locations in Ohio, AAA-Allied Group Inc. said its looking at fast multi-state expansion.
While the deal won’t close until Nov. 1, AAA expects to expand Sumerel locations beyond its Cincinnati-Columbus base to some of the other six states it serves, from Connecticut to Kansas. And add traditional AAA travel and insurance services to the stores.
Right now, AAA is integrating its own people into the Sumerel Tire stores, and working on specific plans to bring AAA products and services to the stores. AAA chairman and CEO James “Chip” Pease III, told local media, “Our plan is to expand it as quickly as we can, but stay in control. The leverage between the two makes a lot of sense. It’s a logical extension of those business lines for both of us.”
Pease said that the Sumerel name would remain, as will its more than 200 employees. Craig Sumerel will stay on as president of the retail unit.
According to reports, the addition of Sumerel Tire will add some 10% to AAA’s 2008 revenue of $435 million. With 750,000 AAA members residing in Sumerel’s market areas, there is obvious potential for even more growth. AAA has already said it will offer its members discounts for Sumerel products and services.
The addition of AAA’s bread-and-butter travel and insurance services to the retail store mix could deliver even greater returns, not to mention a boost to already high retention rate and travel and insurance marketshares.
Craig Sumerel said that the business really wasn’t for sale, but AAA approached the family earlier this year. “It was something that we were really shocked about at first,” Sumerel said. “We talked to them for quite some time. It was not an easy decision because we built this company up over the last 42 years and we had a lot of pride in that.”