Former VP at American Tire Distributors Inc
- Trends and developments in the tyre industry focusing on ATD (American Tire Distributors)
- Competitive dynamics considering tyre manufacturers such as Goodyear (NASDAQ: GT) and Michelin (PAR: ML) and potential to circumvent ATD
- Near-terms headwinds including inflationary environment, ATD's supplier relationships and supply chain disruptions
- Medium-to-long-term outlook including likely exit strategy
Could you start by sharing 2-3 key trends or developments you’ve been following in the tyre industry?
Would the older customer demographic such as your grandfather – who have a specific tyre brand in mind – be interested in going direct? They know what tyre they want, they’re going to do it online and they can just order it there and fit them. Alternatively, are the different customers tiers buying differently, and is this mostly a gen Z, gen Y and millennial transaction?
What pace is the market growing at? What are your expectations for 2022, 2023 and mid-to-longer term over the next 3-5 years?
You noted the potential to interact with micro hubs and build that relationship. What interesting approaches are ATD [American Tire Distributors] or its peers pursuing to take advantage of the markets that are developing?
What are your thoughts on the competitive landscape? Where does ATD sit compared to peers and other key players that are breaking through that traditional business unit?
You described the relationship with Walmart, Michelin and the dollar back in and out strategy. Is there any chance Michelin follows suit and pulls out of ATD, or is that relationship pretty solid?
You said Bridgestone and Firestone pulled their volumes out of ATD as well. Do you think that was a strategic error, or is there an upside that Bridgestone is working through? What was the likely rationale?
You discussed ATD increasing volumes of other brands, and you mentioned Continental. Which other brands are taking up share within ATD, and is the company also working to develop and grow its own proprietary brand volumes?
How should we frame growth rates for the 3PL [third-party logistics] segment? How much more volume could ATD potentially bring into its network through this, and at what margin profile?
What is your up-to-date perspective on tyre availability and fill rates? What are you seeing today vs 2019 or prior to some of the inflationary and supply chain issues we’re noting today?
What are some of the key inflationary pressures impacting ATD’s business model? How significantly are they impacting the company’s costs and margins, and how is it addressing them?
ATD is now owned by its pre-petition creditors. What will be the likely exit strategy? Who could they sell the company to, and is it a potential IPO candidate?
Could you summarise a best- and worst-case scenario for ATD over the next 12-18 months?
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