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The Super Stores


2/1/2006
By Brian Cruickshank

 

This article examines those companies that made notable acquisitions or changes over the last 12 months. The complete list of the top 20 store groups in the market can be found on the link below.

Super Stores List

Like 2004, 2005 was another year of notable growth for some of the largest store groups in the U.S.

Much of this growth stemmed from acquisitions of other large store groups, and because of this, three top-20 store groups are absent from this year's Super Stores: Murray's (acquired by CSK), Midwest Auto Parts Distributors (acquired by O'Reilly Auto Parts) and Autopart International (acquired by Advance Auto Parts).

Just about every company on our annual list grew their store counts. In fact, some enjoyed significant growth, with four companies growing their respective store counts by more than 10 percent: Parts Depot, -which grew its store count by an impressive 31 percent - followed by O'Reilly, Auto-Wares and CSK. For a complete look at how each of the top 20 chains grew over the last 12 months, see Store Counts: 2006 vs. 2005 on page 40.

FOUR-YEAR PERSPECTIVE
Here are the total number of stores represented by the top 20 store chains over the last four years.


  • 2003: 11,823

  • 2004: 12,339 (+4.3%)

  • 2005: 12,964 (+5%)

  • 2006: 13,496 (+4.1%)

AUTOZONE: UNDER NEW LEADERSHIP
When Steve Odland left his position as president of the largest auto parts retailer in the U.S., he left big shoes to fill. If anything, Odland's tenure was one of growth, both from a store count and a financial standpoint, with AutoZone stock tripling during his leadership. Whether the company continues its laudable growth rests on the capable shoulders of the company's relatively new president, longtime AutoZoner Bill Rhodes.

On the store growth side, AutoZone opened 193 stores in 2005 and added a new distribution center. As for sales growth, there have been challenges. The company notes that sales growth has come as a result of new store openings, not from comp store sales, which fell 2 percent. Retail DIY sales increased 1.4 percent and commercial sales decreased 3 percent over the previous year. Despite these challenges, AutoZone continues to invest in its current stores and training, as well as repositioning its AZ Commercial division to grab more installer business.

ADVANCE AUTO PARTS: ACQUIRES AUTOPART INTERNATIONAL
In mid-September, Advance Auto Parts made the surprising announcement that it had acquired Sharon, PA-based Autopart International (AI).

AI provides replacement automotive parts to a segment of the market Advance, like rival AutoZone, very much desires to grow: the do-it-for-me commercial market.

Privately held, AI's 61 auto parts stores throughout New England and New York complement Advance's growing presence in the Northeast. Including the 61 stores acquired in this transaction, Advance's store count grew to 2,829, and increased its expected yearly store count by a significant margin.

"The commercial market represents an excellent growth opportunity for Advance," said Jim Wade, Advance's executive vice president, business development, at the time of the AI announcement. "The acquisition of AI augments Advance's share of the still highly fragmented commercial market."

In addition to acquiring stores such as AI and another New England store chain, Lappen Auto Parts, Advance continued its impressive education programs. In-store clinics streaming from "Advance TV" walk customers through many routine repair and maintenance procedures.

Last month, the company announced that its online consumer education initiative, "Advance Know-How," is now under a newly branded consumer education section of its Web site. The new section educates vehicle owners through hundreds of pages of new print and video on a wide variety of topics, including how to save gas, safe driving habits and step-by-step instructions on how to fix and maintain vehicles. The new site's "How-To Video Clinics" section contains streaming video from Advance TV, as well as 15 how-to video clinics that teach drivers how to prepare their vehicles for winter, increase fuel mileage or focus on other maintenance and repair projects.

For more information on the company and its plans for the future, you can read an exclusive interview with Advance CEO Michael Coppola, which begins on page 41.

O'REILLY AUTO PARTS: CONTINUES IMPRESSIVE GROWTH
O'Reilly's impressive growth strategy continued in 2005 with the May acquisition of privately held Midwest Auto Parts. Midwest was the 16th largest store group in the country prior to its acquisition. Midwest added an additional 71 stores to O'Reilly's growing footprint.

Midwest operated stores in Minnesota, Montana, South Dakota, Wisconsin and Wyoming, receiving deliveries from its distribution centers in St. Paul, MN, and Billings, MT.

In addition to the Midwest acquisition, O'Reilly said it would continue to add stores in 2005, and the company did just that, adding another 79 stores, bringing its total to 1,450.

PEP BOYS: REMODELING STORES
Although Pep Boys closed two stores in 2005, it continued to remodel and revamp its existing stores, adding a new look and products.

In mid-2005, the company unveiled newly remodeled stores in several key markets. The stores, which have undergone significant internal and external transformations, tangibly demonstrated Pep Boys' desire to revitalize its inventory.

These re-openings reflect stores that focus sharply on providing customers with a wide range of basic automotive parts, accessories and tires. In addition, each store has been extensively re-merchandised and stocked with new products - some of them decidedly unconventional - ranging from tools and ATVs to generators, mobile entertainment and repair equipment. An ultramodern interior design, which reflects the new red, white and blue Pep Boys corporate colors, includes multimedia displays, dynamic signage and customized areas for new product categories. The store faades and exterior signs have also been updated.

Pep Boys says the new look has proven to be successful among customers in key markets such as Jacksonville, FL, Los Angeles, San Diego, Chicago and Philadelphia. By 2007, Pep Boys plans to complete the refurbishment of all of its 593 stores.

CSK: EXPANDS INTO NEW MARKET
Generally a quiet company, CSK made headlines in late '05 with its acquisition of Murray's Discount Auto Parts, a private company headquartered in Belleville, MI. Prior to the acquisition, Murray's was the 11th largest store group in the U.S.

Murray's operated 109 automotive parts and accessories retail stores in Michigan, Illinois, Ohio and Indiana, states in which CSK previously had no real market presence.

CSK said this acquisition compliments the company's existing operations, expands the company's market presence to 22 states in the western and Midwestern U.S. and facilitates future growth into new market areas.

Around the same time, Murray's opened the largest automotive parts and accessories store in the Midwest, located in Mundelein, IL. At more than 12,000-square-feet, Murray's newest store is more than twice as large as the typical automotive parts store. The store features expanded product lines, with products ranging from truck and motorcycle accessories, to automotive electronics and audio equipment. It also sells a wide variety of bicycle parts and accessories.

UNI-SELECT: CONTINUES U.S. EXPANSION
One of the most active store consolidators in the industry, Canadian-based Uni-Select, continued its growth in both the U.S. and Canadian markets.

Uni-Select leapt onto the Super Stores list in 2004 with its huge acquisition of IAPA member MAWDI. Four months later, in early 2005, Uni-Select expanded its reach into the U.S. market with the acquisition of fellow Parts Plus member Motor Parts Warehouse (MPW). MPW operated two distribution centers in St. Louis, MO.

In June '05, the company purchased the assets of Action Automotive Distributing, Inc., a large jobber located in Washington state, and Kirkland Auto Parts, Inc., a smaller jobber located in the same area. Uni-Select also acquired part of the assets of Johnson Industries, Inc. located in Texas and Oklahoma. In addition, Uni-Select completed the acquisition of the assets of Marton, Inc., in New England.

Finally in late 2005, Uni-Select purchased the assets of The Kunz Oil Co. Kunz Oil operates a distribution center and three branch locations in the Minneapolis area.

STRAUSS DISCOUNT JOINS PROGRAM DISTRIBUTION RANKS
Although it made no acquisitions in 2005, Strauss Discount Auto made an important decision in 2005: to join a program distribution group.

Prior to the decision, Strauss was a true independent, retail-focused distributor - one of the oldest in the entire industry. It's also the largest automotive parts and service chain serving the Metro New York, New Jersey and Philadelphia area markets. Founded in 1919 in Newark, NJ, as R&S Home And Auto Stores, Strauss now operates more than 100 stores, the majority with automotive service centers offering auto parts, tires and automotive repair services.

In March, Strauss announced its decision to join the National Pronto marketing group, coinciding with the group's merger with retail-focused program group, RPM.

At the time, Joe Catalano, president and COO of Strauss said, "The announced union of RPM with Pronto only serves to enhance the value that membership provides for our organization. The growth that our stores represent for the group will only strengthen the benefits we expect from our membership."

PARTS DEPOT: GROWS STORE COUNT BY ONE-THIRD
Parts Depot grew its store count by the greatest margin in 2005, expanding its store population by nearly a third.

In 2005, Aftermarket Auto Parts Alliance member Parts Depot Inc. acquired Miami-based WD Tropical International, a member of the IAPA program group. Tropical operated 32 distribution centers in Florida. It was founded in 1978, and over the years has evolved into a full-line distributor (including ACDelco and Motorcraft).

Continuing its growth, Parts Depot also purchased Tri-Citi Automotive Warehouse, a National Pronto Association member based in Tampa, FL. Tri-Citi currently operates one warehouse and four stores, and serves more than 100 independent jobbers across the mid-Florida region.

VIP DISCOUNT, THE MERRILL CO & BROOKS: NEW TO THE LIST
New to the Super Stores list are VIP Discount, The Merrill Company/ Arnold Motor Supply and Brooks Auto Parts.

VIP Discount, based in Lewiston, ME, operates 53 stores in Maine, Massachusetts and New Hampshire. The company, which is privately owned, celebrates its 50th year in business this year.

The Merrill Co/Arnold Motor Supply, now ranked #19, was started in 1927. Today, the company, which is an Aftermarket Auto Parts Alliance member, operates 50 stores in the Plains states region.

And finally in the #20 spot, Brooks Auto Parts, based in Douglas, GA, operates 42 NAPA stores, all in Georgia.

Throughout 2006, Counterman will continue to closely watch these distributors and report any acquisitions these, and others, make in the ever-changing distribution landscape.

Store Counts: 2006 vs. 2005
Distributor '05 Ranking '06 Ranking Change
AutoZone 1 1 +4.8
Advance 2 2 +8.3
General Parts Inc. 3 3 0.0
O'Reilly Auto Parts 4 4 +16
CSK 5 5 +11.8
Genuine Parts Co. 6 6 0.0
Pep Boys 7 7 - .03
Fisher APW 8 8 0.0
Uni-Select 9 9 +5.2
Replacement Parts Inc. 10 10 0.0
AutoZone 1 1 +4.8
Murray's Discount Auto 11
Acquired by CSK
BWP Distributors 12 11 +.09
Strauss Discount Auto 13 12 -.03
Parts Depot 14 13 +31.6
Auto-Wares 15 14 +14.3
Hahn Automotive Warehouse 16 15 0.0
KOI Warehouse 17 16 0.0
Midwest Auto Parts 18 Acquired by
O'Reilly AP

Auto Parts Headquarters 19 17 +6.3
Autopart International 20 Acquired by Advance AP
New to the top 20 list: VIP Discount (18), The Merrill Co. (19) and Brooks (20).















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