On Friday, two of the largest tire suppliers in the United States announced the joining of forces, avoiding any future competition. Based in Arizona Discount Tire is in the process of acquiring Indiana-based Tire Rack, and the transaction is expected to close on December 31. With unpredictable rubber sourcing challenges and price increases at stake, this could mean a more solid foundation for both suppliers.
The two family brands, Reduced price tire and Tire carrier have similar stories. Bruce T. Halle rented an old plumbing supply building in Ann Arbor, Michigan with an inventory of six tires, managing the entire place himself. Store by store, Halle has grown the business and now 1,100 Discount Tire stores are open in 37 states in the United States. Meanwhile, Tire Rack was founded in Indiana in 1979 by Dutch immigrant Peter Veldman. Today, Tire Rack manages 2.7 million square feet of distribution center space.
If tire prices go up at Discount Tire or Tire Rack, it is much more likely to be the result of the threat of a rubber shortage than of acquisition. The new combined leadership team believes they can have a bigger impact as a team than as competitors. And I really hope the new team doesn’t have an ax Tire Rack Street Survival Program, which teaches teens how to be better drivers.
“This [acquisition] accelerates our omnichannel strategy, provides a wider distribution network and a platform to enhance our B2B and fleet capabilities, ”said Dean Muglia, CEO of Discount Tire. “Quite simply, we are better together.
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