Two of the largest tire businesses in the US are merging operations to become an industry powerhouse. Discount Tire is acquiring Tire Rack for an as-yet-undisclosed sum with an expected close of December 31, 2021. When the deal is complete, the combined company will employ 25,000 people and vastly improve their ability to meet customers wherever they want – in-store, online, or mobile installations.
Dean Muglia is the CEO at Discount Tire and will continue in that role. He said in a press release, “We have for many years admired one another from afar, each pushing the industry forward to meet customers where they are most confident shopping for tires and wheels. We could not be more excited about adding Tire Rack’s operations and its excellent team led by Mike Joines, who I’ve come to know well. This accelerates our omnichannel strategy, provides a broader distribution network and a platform to enhance our B2B and fleet capabilities. Quite simply, we are better together.”
The transaction is a huge deal for an industry threatened by a rubber shortage. With Tire Rack as a part of the Discount Tire family, they shore up potential supply chain issues for both retail and B2B sales. Tire Rack will continue to operate online through their current website and with mobile service through Tire Rack Mobile Installation. Wholesale and dealer tire transactions will stay as TR Wholesale Solutions.
Family-owned businesses with likeminded goals
Peter and Wilma Veldman founded Tire Rack in 1979 along with their current CEO, Mike Joines. Over the course of more than four decades, they established the company as an authority in tire research and information along with tire and accessory sales.
Discount Tire also began, and still is, a family business. Founded in 1960 by Bruce T. Halle, it grew from a single location selling just six tires to a massive company employing around 24,000 people and operating 1,100 locations in 37 states.
Both companies state that their goal is to better serve their customers, and the acquisition takes aim directly at an omnichannel customer experience.
“We believe we can provide a greater impact through better service to customers that have chosen Tire Rack for their tire and wheel needs and provide better opportunities for our Team Members through this partnership,” said Mike Joines, Tire Rack CEO. “Joining the Discount Tire family is an incredible milestone for our business, an opportunity for our Team Members and a testament to the hard work and legacy of Pete and Wilma Veldman.”
What it means for dealer tire sales
Both Discount Tire and Tire Rack are popular suppliers chosen by dealerships for their tire and wheel inventory. But Discount Tire is also a competitor with their retail locations, aiming to capitalize on tire sales among customers looking for a bargain.
At first glance, it appears that it will remain status quo for now, with one exception. Purchasing Tire Rack is likely to mean that Discount Tire will have first right of refusal for incoming inventory. For certain brands, sizes, or styles that are in high demand, Discount Tire could be positioned better to capture those sales with a more robust supply chain through Tire Rack. These instances are rather remote and are not likely to impact dealership business. The opposite is probably with better supply available to dealerships.
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