Modern Tire Dealer

MAR 2019

Magazine for the professional tire industry

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8 N e w s / V i e w s F or 52 years Les Schwab Tire Centers Inc. had a n e x c l u s i v e , mu l t i - state territor y with Toyo Tire USA Corp. That deal, which effectively locked out other tire dealers, including online retailers, from selling Toyo-branded products in the northwest corner of the U.S., has come to an end. As of Jan. 1, 2019, Toyo is open to doing passenger and light truck tire business with other tire dealers in Oregon and Washington, plus the por- tions of Idaho, Northern Cali- fornia, Montana and Nevada which previously were locked up in the Les Schwab territory. Randy Gaetz, senior vice president of sales for Toyo, said that doesn't mean the tire manufacturer has parted ways with Les Schwab. It simply means the Oregon- grown dealer, the fih-largest independent tire dealer in the U.S. with more than 420 company-owned stores, no longer has the exclusive rights to sell Toyo passenger and light truck tires in those states. "We will continue to sell tires to Les Schwab," Gaetz said in an interview with Modern Tire Dealer. "Les Schwab was our biggest customer." Gaetz said Les Schwab will remain one of Toyo's top 10 customers. Les Schwab does maintain an exclusive territory for Toyo-brand commercial truck tires in Oregon and Washington through the end of 2019. at truck tire agreement continues on a year-to-year basis, and Gaetz said Toyo and Les Schwab will sit down to talk about renewing that commercial territory agreement in the fall. e change means Toyo is working to reach into every viable market in the former Les Schwab PLT territory, and in mid-February that took Gaetz and a team of Toyo representatives to the annual meeting of Point S tire dealers in the U.S. Toyo has joined the ranks as one of five preferred partner vendors with Point S, and Toyo tires arrived in the Point S warehouses a week before the meeting. Even though the Point S network is growing eastward, it remains heavily concentrated in the northwest corner of the U.S., which Les Schwab also calls home. Gaetz does expect the changes with Les Schwab to ding the company's sales in the region, yet, he sees potential. "It's going to take time to build it back." How long? "Two to three years." As for Les Schwab, Chief Marketing Officer Dale ompson said the tire dealer remains committed "to providing the best performing products to our customers no matter what price point or segment they are in. Toyo tires have been a significant product offering for many years and we will continue to sell them in the segments when there is a benefit to our custom- ers. We look forward to keeping a strong relationship with Toyo." ompson called Toyo "a valued busi- ness partner for more than 50 years," but said over time "the industry has changed and Les Schwab's needs have changed. "Shis in the distribution market, and Les Schwab's grow- ing regional footprint, made our limited exclusivity with Toyo challenging in new markets. As a result, we've shied our product strategy, and diversified our selection. "With our focus on contin- ued growth outside the Pacific Northwest, we will remain nimble with a product screen focused on the customers' needs in each market." Les Schwab the dealership follows the principles of its founder and namesake, who died in 2007. He believed in promoting one name as the provider of tires for consumers: Les Schwab. at branding continues in store, and online, where there's no mention of major brand names. ompson said, "Manufacturer brand tires will remain an important part of our product mix." But the company will continue to leverage its private brands. "Over more than 65 years we've grown to be one of the largest tire retailers in the country, and in many cases we are able to leverage our sales volume with tire manufacturers to develop brands and products with performance attributes that specifically meet our customers' requirements. "About five years ago Les Schwab looked at ways to improve our product offerings to our customers while ensuring all of our current and future stores can focus on product performance for our customers, instead of nationally known brand place- ment and reputations. It has always been our focus to provide the best service and tire performance regardless of national brand recognition. By designing our tires in cooperation with key manufacturing partners we continue to be able to give our customers excellent products, at fair prices." — Joy Kopcha and Ann Neal Toyo and Les Schwab are no longer exclusive TIRE DEALER LOOKS TO NEW TIRES AND NEW MARKETS M T D M a r c h 2 0 1 9 The Toyo team was drumming up new business with Point S tire dealers at its annual dealer meeting in February. From left, Sam Felberbaum, director of sales, Randy Gaetz, senior vice president of sales, and Sonny McDonald, national training manager.

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