Stuart Schuette, up until recently the CEO of American Tire Distributors Inc. (ATD), guided the company through several turbulent episodes. But his efforts also positioned the company for continued growth.
Replaced a few weeks ago by Michael Feder, ATD’s interim CEO, Schuette joined the Huntersville, N.C.-based wholesale distributor in 2016, following the retirement of Bill Berry, who had taken the wheel from Dick Johnson seven years earlier.
Schuette came to ATD from U.S. Foods Inc., the second largest food distribution firm in the United States with more than $23 billion in annual sales. As chief operations officer, Schuette directed functions across 60-plus U.S. Foods locations that together served some 250,000 customers.
Schuette joined ATD during a time of significant internal and external growth. Two years prior to Schuette’s arrival, ATD finalized its $310 million acquisition of Hercules Tire Holdings, which owned 100% of Hercules Tire & Rubber Co.’s stock.
As part of the deal, ATD picked up Hercules’ Tire Dealers Warehouse (TDW) division, which had 15 distribution centers throughout the U.S., plus six warehouses in Canada. (New York City-based private equity firm FdG Associates had acquired Hercules in 2005.)
TireHub emerges
In April 2018, some two years into Schuette’s term, ATD was dealt an unexpected blow when Goodyear Tire & Rubber Co. and Bridgestone Americas Inc. joined forces to form TireHub LLC and cut off supply of their consumer tire lines and brands to ATD’s warehouses.
In a letter sent to customers shortly after TireHub’s creation, Schuette said ATD was “disappointed by Goodyear’s choice, given the investment ATD has made in building the Goodyear family of brands and supporting its products over the last decade and the effect it will have on all of you.”
Commenting on Bridgestone, in a separate statement, ATD said it also was “disappointed by Bridgestone’s decision to no longer use ATD as a distributor of their products in the United States, which we believe limits consumer choice.”
Chapter 11
2018 continued to bring problems for ATD. In October, ATD filed for Chapter 11, which it spun as “a positive, intentional and strategic next step in the process of making ATD stronger than ever.
“We entered into a definitive agreement with approximately 75% of our bondholders that would reduce the company’s debt by approximately $1.1 billion and provide us with financial flexibility as we continue our ongoing transformation,” ATD officials said at the time.
In a late-October letter to ATD shareholders, Schuette said that ATD had “a clear roadmap for the next steps in this process and the support of our key financial stakeholders has us on track to emerge by the end of the year as a stronger company with less debt that is even better-positioned to serve our customers.”
By late-December 2018, under Schuette’s guidance, ATD emerged from bankruptcy after recapitalizing and hitting its debt reduction target.
"We are a stronger company with the financial flexibility to build on an 80-year history of leadership and innovation,” he said. “We are laser-focused on delivering greater value for our customers and manufacturer partners, with differentiated capabilities based on advanced analytics."
On the upswing
With ATD in a better position, Schuette realigned the company’s senior leadership team during the second quarter of 2019, appointing a new chief operating officer, a new chief merchant and strategy officer and a new chief digital/technology officer. Later in the year, he named Greg Bell president of ATD’s Tire Pros associate dealer program, which was in a period of rapid expansion. (Bell joined ATD in 2007 and had risen to the position of vice president, inside sales and call center.)
When the COVID-19 pandemic hit, ATD kept all of its distribution centers open and operational and used the opportunity to roll-out various digital tools, including a mobile app that let customers check inventory levels and track deliveries.
In March 2021, ATD further enhanced its digital offerings by partnering with Tirescanner.com to form a new version of Tirebuyer.com. (ATD, however, wasn’t completely immune to the impact of COVID-19. In summer 2021, the company was forced to boost its flat-rate shipping fees in response to a severe escalation in freight costs.)
As 2021 progressed, ATD continued to invest in its Hercules brand by expanding the Strong Guard TBR line in September, refreshing the Terra Trac light truck tire line one month later and launching a UTV tire in November, while ramping up Hercules’ consumer marketing spend across several sports platforms.
ATD followed this in the first quarter of 2022 by unveiling its first-ever Hercules brand ag tire, followed by a reboot of the company’s Hercules and Ironman brands, which included the further roll-out of new products.
Wholesale changes
The rest of 2022 brought more changes. In May, Monro Inc. announced that it was selling its wholesale tire distribution business, valued at $105 million, to ATD.
In return, ATD agreed to supply tires directly to Monro locations, which at the time numbered around 1,300, with 865 of those outlets selling tires. (Monro President and CEO Michael Broderick told investors that a review of the Rochester, N.Y.-based company’s wholesale business confirmed that it was “too small to be an effective competitor.”)
The deal, finalized on June 17, included seven Monro wholesale locations in Kentucky, Tennessee, North Carolina and South Carolina, which together served more than 3,500 customers.
Less than one month later, ATD announced that it was selling its National Tire Distributors (NTD) subsidiary, which operated in Canada, to Quebec-based Group Touchette Inc.
ATD agreed to supply Groupe Touchette and NTD with Hercules and Ironman brand tires and "make its advanced analytics software and productivity-enhancing tools available to Groupe Touchette's network." (In 2016, through its TriCan Tire Distributors Inc. subsidiary, ATD rebranded its Canadian wholesale distribution business as NTD, placing WTD and several other ATD-owned distributors under the newly established banner.)
New D/Cs and digital
ATD put renewed emphasis on opening new distribution centers as 2023 began. In March 2023, the company opened a 160,000-square-foot distribution center in Salt Lake City, Utah. The facility is 40,000 square feet larger than ATD's previous location in the area.
One month later, ATD opened a new distribution center in Louisville, Ky., that was bigger than the firm’s previous, 22-year-old warehouse in the city, where ATD, under its own banner and previous names, had operated for more than 30 years. The distribution center now serves tire dealers across 53 counties in Kentucky and Indiana.
This past June, ATD opened its first regional distribution center in McDonough, Ga. The facility serves as a central hub supporting 22 distribution centers across Georgia, Florida, Alabama, Louisiana, Mississippi and Tennessee. ATD invested $10.5 million in the nearly 760,000-square-foot warehouse, which will carry more than 10,000 SKUs.
“Opening our inaugural regional distribution center in McDonough marks a pivotal moment for American Tire Distributors and our supply chain capabilities,” Schuette said when the new facility was announced.
Under Schuette’s direction, ATD also continued to ramp up its digital capabilities, launching Radius - a digital hub designed to integrate tires, parts, services and solutions into one connected experience – in November 2023.
ATD officials told MTD that Radius “seamlessly” integrated “into business operations to increase efficiency and optimize both sales and service.”
“We’re excited to unveil Radius and with it, usher in a new era of connectivity and simplicity to better serve our customers,” Schuette said when Radius was unveiled.
Upon Schuette’s departure from ATD earlier this month, company officials stated that they were “deeply appreciative” of his leadership, which was “marked by his empathy for our associates and customers. Stuart is a visionary and guided ATD through an ongoing business transformation with passion and dedication.”
