(Update: Company confirms plans to sell, details)
Retailer's CEO says decision to sell 'was not made lightly'
BEND, Ore. (KTVZ) -- Les Schwab Tire Centers, one of the most iconic Central Oregon-born companies and the region's third-largest private employer, announced Thursday it has put itself up for sale, a deal that analysts say could fetch up to $3 billion.
The news that the company was considering a sale was first reported Tuesday morning by Bloomberg, quoting sources, quickly followed by a company news release confirming it has put itself on the market:
Les Schwab Tire Centers to be Sold
To Support Future Growth, Success
"BEND, Ore. – DECEMBER 23, 2019 – The nation’s highest-ranked, most customer-focused tire retailer – Les Schwab Tire Centers – announced its intention to sell the company to position it for additional growth and success, Les Schwab CEO Jack Cuniff announced today.
"The private company’s board of directors and its shareholders, who are all relatives of founder Les Schwab, decided to seek new ownership for the company. They made the decision from a position of strength and based on the realities of being a family-owned business with five generations of family members.
“This company is strong,” Cuniff said. “We believe this is the best way to honor Les’ vision for the company and stores and support growth and innovation. Our owners are responsible stewards, and this decision was made after much consideration. It was not made lightly.”
The Schwab family shareholders said in a joint statement:
“Given the complexities of a fifth-generation family business, and managing a company of our size, we are at an important point in the life of Les Schwab Tire Centers. As our family grows and ages, it is increasingly critical to us that ownership remain committed and aligned behind our Grandfather’s vision.
“After careful review and a lot of consideration, we concluded a new ownership group will help ensure future opportunity for our wonderful employees and secure continued success for the company as it grows. We believe a new owner – one with deep experience and resources – will carry forward the Les Schwab vision far into the future.
“Our incredible Tire Centers, and the company and communities we have built together, make us proud. As hard as it is to make the decision to sell this company, we are confident it will offer tremendous opportunity to build on all we have accomplished together for our customers, communities and our employees. We are excited to see what the future will bring.”
"Known for its great value and high-quality products, innovative business practices and outstanding customer service, Les Schwab is a strong brand with deep local ties in the communities it serves. The company has a track record of living the ideals embraced by its founder, who started the company in 1952. Its stores are fixtures in hundreds of communities in 10 states across the West, where they sponsor youth activities and other local events. The company has hired Goldman Sachs Group, Inc. to represent Les Schwab in the sales process, which is expected to take several months.
"About Les Schwab
Les Schwab Tire Centers (www.lesschwab.com) is one of the leading independent tire dealers in the United States, with more than 7,000 employees and more than 492 locations throughout Oregon, Washington, Alaska, Idaho, Montana, California, Nevada, Utah, Colorado and Wyoming. The company has been recognized for its business practices through several awards, including a Milestone award from the Oregon Sustainability Board; Oregon Economic and Community Development Department honors; an Environmental Excellence award from the Association of Washington Business; an Integrity Counts award from the Northern Idaho Better Business Bureau; and The Oregonian 2012, 2013, 2014, 2015 and 2016 Top Workplace recognition. In August this year, leading national consumer magazine Consumer Reports rated Les Schwab the No. 1 tire retailer. Also in 2019, J.D. Power awarded Les Schwab No. 1 in Customer Satisfaction with Tire Replacement and Aftermarket General Maintenance. "
The company was founded in 1952 and traces its roots to a single store in Prineville owned by Les Schwab, who died in 2007. He and two siblings grew up in a two-room shack in a logging camp, and both their parents died when Schwab was in his teens.
Schwab began his career selling and distributing The Bulletin before he bought the floundering Prineville tire shop with just one employee, a business that grew to became one of the largest independent tire retailers in the nation, with a well-known focus on customer service and white-shirted workers who ran to help arriving motorists.
Les Schwab Tires has grown over the years to more than 450 locations across 10 states and more than 7,000 employees. It reported some $1.8 billion in annual revenue, as of 2018. A 2008 video tribute to the founder and the company is available to view on YouTube.
Nearly 1,100 Les Schwab employees are based in Central Oregon, most at the company's Bend headquarters or Prineville distribution warehouse, making the firm the third-largest private employer in the region, behind St. Charles Health System and Bright Wood Corp.
Bloomberg said private equity firms have continued to invest in tire- and auto-focused retailers, in part because they have been less disrupted by the rise of e-commerce.
Here is a background sheet the company provided Tuesday:
Les Schwab Tire Centers Background Information
Les Schwab Tire Centers (www.lesschwab.com), headquartered in Bend, Oregon is one of the leading independent tire dealers in the United States. The company has over 7,000 employees in over 490 locations throughout Oregon, Washington, Alaska, Idaho, Montana, California, Nevada, Utah, Colorado and Wyoming. Les Schwab founded the company bearing his name in 1952 and quickly established a reputation for outstanding customer service. The first Les Schwab stores were opened in small towns and rural communities with one guiding principle – provide your neighbors with outstanding customer service and high-quality products. This single-minded focus on servicing customers continues today. “Pride in Performance,” a slogan coined by the founder explains each employee’s commitment to providing the best tire value and always delivering world-class customer service.
Les Schwab is recognized for several innovative business practices. It pioneered the concept of offering a supermarket selection of tires in its showrooms – allowing customers the opportunity to inspect and select the exact tires they want. For over 50 years, the company has stood behind its products and services by providing customers with written warranties on tires, brakes and other products.
Other innovations include industry leading employee recruitment and retention programs. Les Schwab believes world-class customer service starts with employees who are powerfully motivated to serve. The company incentivizes employees who put the customer first with opportunities to advance within the organization and provides online and hands-on training to help them hone their skills. Through its long-standing policy to promote from within, every hourly employee has the opportunity to be promoted to store management.
Les Schwab’s employee rewards program exceeds any other in the retail tire industry. The company established its first profit share program in 1954, and today shares approximately half of its profits with employees through generous health benefits, bonuses and retirement programs. The company also offers paid holiday and vacation, disability coverage and life insurance programs.
At Les Schwab, the commitment to service is threefold – service to customers, to employees and to communities. The company is recognized for its volunteer efforts, sponsorships, local environmental and business practices. It has received several awards including: a Milestone award from the Oregon Sustainability Board, Oregon Economic and Community Development Department honors, an Environmental Excellence award from the Association of Washington Business, an Integrity Counts award from the Northern Idaho Better Business Bureau, and The Oregonian Top Workplace recognition every year from 2012-2018.
"The company continues to actively focus on growth and expansion, as well as delivering the best selection, quality and service that customers have come to expect. Recently appointed CEO Jack Cuniff, an 11-year veteran of Les Schwab, says that during this growth the company remains committed to its founding principles: to deliver a legendary level of customer service, while leading in a rapidly changing retail environment.
Les Schwab Tire Centers Fast Facts
Number of Stores: 492 (Sept. 30, 2019)
Retail Sales: $ 1.8 Billion (September, 2019)
Number of Employees: Over 7,000
Locations: Oregon, Washington, Alaska, Idaho, Montana, California, Nevada, Utah, Colorado and Wyoming
Company Headquarters: Bend, Oregon
20900 Cooley Road
Bend, Oregon 97701
Key Officers: Jack Cuniff, Chief Executive Officer
John Robertson, President of Store Operations
Corey Parks, Chief Administration Officer
Dale Thompson, Chief Marketing Officer
Recent Awards & Recognition: Tire Dealer of the Year – Modern Tire Dealer, 2000
Family Business Award – Oregon State University, 2002
Best Passenger-Vehicle and Light-truck Tire Retailer – J.D. Power, 2000-2003
Governor’s Gold Award – Oregon Governor Ted Kulongoski, 2003
Best Places to Work – Oregon Business Magazine, 2008
Environmental Excellence Award – Association of Washington Business, 2008
Better Business Bureau Integrity Counts! Honoree, Snake River Region – Idaho Better Business Bureau, 2010
Heart of the Community Award – Hands on Greater Portland, 2013
Top Work Places in Oregon and Southwest Washington – Oregonian, 2012-2018
People’s Choice Award – The Fresno Bee, 2018
People’s Choice Award – Tri-City Herald, 2018
Oregon Ethics in Business Award – Rotary Club of Portland, 2018
#1 Ranked Tire Retailer – Consumer Reports, 2019