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Les Schwab, the Bend tire powerhouse known for its customer service, company culture and — once — its fierce commitment to keeping the business in the family, is considering a sale.

The privately held company on Tuesday confirmed it had hired Goldman Sachs to find a buyer. It didn’t disclose a potential buyer or expected price tag.

Bloomberg News reported earlier that the company expected it could fetch a price of at least $3 billion. The report, attributed to people with knowledge of the matter who asked not to be identified because of the deal’s privacy, said that the company is working with an adviser as it weighs alternatives including divesting its real estate portfolio.

It’s a historic, and surprising, move for the business. Long after Les Schwab founded his eponymous company in 1952, he made it clear that he had no interest in passing control of the company to anyone outside his family.

“This company isn’t for sale,” he told The Oregonian in 1997. “It will go on, bigger and better than ever and continue to provide opportunities for young people to be successful. All the stock will remain in our family.”

In step with his desire to keep the business family-owned, Schwab rebuffed offers over the years from French tire magnate Francois Michelin and billionaire investor Warren Buffet.

Schwab reckoned with the fate of the business and its ownership when, in 2006, his daughter Margie Denton passed away after a long battle with cancer. Schwab’s son Harlan had died in a 1971 car crash.

The loss of his second child devastated Schwab, and it also forced him to re-evaluate the future of the company. Until Denton’s death, the tire baron had trained his daughter, a board member and active participant in the family business, to take the reins when he stepped down. Denton had also pledged to keep the business in the family, at least through her generation.

The responsibility of the business would fall to Schwab’s four grandchildren, who weren’t as active in the business as their parents and grandparents.

The family shareholders said in a statement Tuesday that the decision to sell, made “from a position of strength,” would help ensure the company’s longevity.

“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," they wrote. “As our family grows and ages, it is increasingly critical to us that ownership remain committed and aligned behind our grandfather’s vision.”

Now led by Chief Executive Officer Jack Cuniff, the company has $1.8 billion in annual revenue, according to a November 2018 interview with the Bend Bulletin. Les Schwab operates 492 locations across 10 states, including Washington, Oregon and California.

Les Schwab is one of the largest employers in central Oregon, and its sale could throw its large regional workforce — split between white-collar jobs at the company’s Bend headquarters and blue-collar ones at its warehousing and manufacturing operations in Prineville — into doubt.

A large employer with a workforce that cuts across income brackets is a rarity in more rural parts of Oregon, said Damon Runberg, a regional economist for the Oregon Employment Department.

“For a community like Prineville that had some really big losses on the manufacturing side and wood products, (a sale) would create a level of uncertainty in that community in particular,” Runberg said. “And a firm of that size with that many professional jobs in someplace like Bend, that would probably make anybody nervous."

The prospect that Les Schwab could be absorbed by another chain of tire retailers could add to the unease. The administrative, manufacturing and distribution jobs could be seen as obvious cuts as the buyer grows its footprint.

And while Prineville’s economy has made up for the loss of some manufacturing jobs with new data centers operated by some of the biggest names in the tech sector, those server farms haven’t proven to be big enough drivers of middle-wage jobs to offset those lost.

Schwab Tire’s pending sale is the latest in a string of signature Oregon companies that ultimately sold to larger businesses out of state. From Fred Meyer to Tektronix, to more recent deals for Precision Castparts and — just this month — New Seasons, the state has suffered a steady erosion of corporate headquarters.

The deals haven’t derailed Oregon’s economy, which is enjoying one of its longest expansions on record. But the sales worry economists, who feel the state may be vulnerable in the long run without big, local companies to anchor the economy.

And the deals underscore the inability of Oregon entrepreneurs to grow big new businesses to replace those that sold. That may reflect, to a large degree, the nation’s economic concentration in big metropolises like Seattle and the San Francisco Bay Area.

Private equity firms have been investing in tire and auto-focused retailers, in part because they have been less disrupted by the rise of e-commerce, according to Bloomberg. Bain Capital agreed to invest in Dealer Tire in 2018, and earlier this year Greenbriar Equity Group LP acquired Evans Tire & Service Centers, Bloomberg reported. Industry giants, meanwhile, have snapped up smaller rivals, with Goodyear Tire & Rubber Co. agreeing last week to buy Evansville, Indiana-based Raben Tire Co. for an undisclosed amount.

Mike Rogoway and Elliot Njus contributed to this report. Bloomberg contributed to this report.

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Sours: https://www.oregonlive.com/business/2019/12/oregon-tire-empire-les-schwab-considers-putting-itself-up-for-sale.html

Les Schwab Tire Centers has suspended efforts to sell the Bend company, saying that its suitors cannot easily evaluate the business’ value during the coronavirus pandemic.

“It just isn’t practical to invite prospective buyers to visit our facilities and meet employees when travel is so restricted,” the Bend-based company said in a written statement Tuesday. “On top of that, we find ourselves in an unprecedented time with coronavirus affecting almost every aspect of our lives and work.”

Schwab Tire announced plans to sell the 68-year-old business in December, shaking up an Oregon institution. Bloomberg News reported that the family-owned company sought at least $3 billion from the sale.

“We continue to believe that new ownership for Les Schwab Tires is the best way to support growth and innovation, and all the opportunities those create for our employees and communities,” the company said in Tuesday’s statement.

Tire Business, an industry news site, first reported the company’s decision to pause the sale process in an article published Monday.

Company founder Les Schwab, his wife and both his children have all died. The business is now owned by his grandchildren, great-grandchildren and great-great-grandchildren, none of whom have an active role running the company.

The decision to sell one of Oregon’s biggest and best-known businesses came as a shock to employees and customers.

The company’s headquarters are in Bend and it serves nearly 500 stores through a single distribution facility in Prineville – the small, relatively remote town where Les Schwab started the business in 1952.

Schwab Tire said annual sales last year were approximately $1.8 billion.

In Monday’s article in Tire Business, chief marketing officer Dale Thompson said Schwab Tire might break up the company as part of a sale. Thompson told The Oregonian/OregonLive on Tuesday that he unintentionally gave the impression in the earlier article and that the company will be sold intact.

“It’s important to be clear Les Schwab has no intention of selling the company’s operations in pieces,” Thompson said in an email. “Our strength is in our brand, and our brand represents the whole of everything we do.”

The coronavirus pandemic has profoundly reduced auto traffic throughout the country, with fewer people traveling for vacation and work. Auto travel in Oregon was down more than 40% in the early days of the pandemic and remains down about 20% compared to this time last year.

"We certainly saw a drop in sales and gradual recovery (in the first half of the year)," Thompson told Tire Dealer. "We've had a little stronger recovery lately. It's been a cycle, and people seem eager to get out and drive again."

This article has been substantially updated with additional information from the company.

-- Mike Rogoway | [email protected] | twitter: @rogoway | 503-294-7699

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Sours: https://www.oregonlive.com/business/2020/06/les-schwab-tire-suspends-plans-to-sell-company-citing-coronavirus.html
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Les Schwab Tire Centers

American tire retailer

Les Schwab Tire Centers is a tire retail chain operating in the western United States. Founded in 1952, the company is named for founder Les Schwab and is headquartered in the Central Oregon city of Bend. The private company employs over 7,000 people in nine western states.

History[edit]

Les Schwab founded the company with a single store in Prineville, Oregon, when he bought OK Rubber Welders in 1952. Corporate headquarters were moved from Prineville and to Bend in 2008.[2] From 1964 until 2011, the firm offered an innovative February "Free-Beef" promotion,[3][4] to boost sales during slow late-winter months.

The company was sued by the Equal Employment Opportunity Commission in 2006 over allegations of gender-based job discrimination.[5] The EEOC suit claimed the company denied women top management positions in the company and noted that at the time of the filing there was but a single female assistant store manager.[5] They were also sued by former employees over the same allegations in a class action lawsuit filed the same year.[5] The federal case was settled in 2010.

On December 12, 2006, Dick Borgman became CEO of the company.[6] That year the company ranked as the 318th largest private company according to Forbes.[7] As of 2007, the chain operates more than 410 stores[8] in Alaska, California, Idaho, Montana, Nevada, Oregon, Utah, and Washington.[8] The company does more than $1.6 billion in sales each year,[8] and is the second largest independent tire retailer in the United States.[5] Founder Les Schwab died in May 2007, with ownership remaining within the family,[2] then chairman Phil Wick died in 2010.[9] Les Schwab Tires entered the Denver metropolitan area with five stores in October 2012, the first in Colorado, bringing the total number of company owned stores to 374.[10] In September 2020, CEO Jack Cuniff announced that the company would be sold to a San Francisco investment fund.[11][12]

Operations[edit]

In addition to tires, the company sells a variety of other auto parts and auto-related services, including brakes and shocks. In 2008, Forbes magazine ranked Les Schwab as the 324th largest privately held company in the country.[1]Modern Tire Dealer has called Les Schwab "arguably the most respected independent tire store chain in the United States."[8] The company closes all of its stores on Sundays, and employees are known for running to customer vehicles when they pull in to park.[8]

See also[edit]

References[edit]

  1. ^ abLes Schwab Tire Centers. Hoovers. Retrieved on March 12, 2008.
  2. ^ abRogoway, Mike (December 16, 2008). "Les Schwab moves to new Bend site". The Oregonian. Retrieved December 18, 2008.
  3. ^"Free Beef certificates". The Bulletin. (Bend, Oregon). (advertisement). March 9, 1967. p. 6.
  4. ^Gazette-Times, Theresa Novak Corvallis. "Memories: What happened to 'free beef'?". Corvallis Gazette Times. Retrieved November 11, 2019.
  5. ^ abcdHunsberger, Brent. "Suit says tire chain practices job bias", The Oregonian, June 1, 2006.
  6. ^Mike Rogoway, "Tire giant rolls hub out of town", The Oregonian 13 December 2006, p. B1+
  7. ^"The Largest Private Companies: #318 Les Schwab Tire Centers". Forbes. November 9, 2006. Retrieved February 21, 2009.
  8. ^ abcdeTire industry icon Les Schwab dies at 89.Modern Tire Dealer, May 18, 2007. Retrieved on November 4, 2011.
  9. ^"Les Schwab Tire Centers, Inc". Businessweek. Bloomberg. Retrieved July 23, 2011.
  10. ^Huspeni, Dennis (October 17, 2012). "Les Schwab Tire Centers opens 1st Colorado stores". Portland Business Journal. Retrieved October 17, 2012.
  11. ^Hayes, Elizabeth (September 29, 2020). "Les Schwab Tires to be sold to investment fund, ending family ownership". Portland Business Journal. Retrieved February 11, 2021.
  12. ^Rogoway, Mike (September 29, 2020). "Les Schwab sold to California investment firm". The Oregonian. Retrieved February 11, 2021.

External links[edit]

Sours: https://en.wikipedia.org/wiki/Les_Schwab_Tire_Centers
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