Les Schwab Tires, a Central Oregon family-run business for nearly 70 years, is for sale “to position it for additional growth and success,” CEO Jack Cuniff confirmed Tuesday.
“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.”
In a press release on Tuesday morning, the company said its 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, according to the release.
Bloomberg reported the Bend-based company could be sold for at least $3 billion.
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,” it continued.
“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.”
Damon Runberg, a local economist with the Oregon Employment Department, said the news should be comforting to local tire store employees.
“I would presume the retail folks would probably feel more secure. If you think about it, if someone acquires a tire store they are probably looking to expand their footprint if it’s another, like a competing, tire company. And presumably those Les Schwab retail locations would probably be pretty safe,” he said.
The company, founded in 1952, traces its roots to a single store in Central Oregon owned by Schwab, who died in 2007. Schwab’s wealth was self-made: He and two siblings grew up in a two-room shack in a logging camp, and both their parents died when Schwab was a teenager, according to the Oregonian. He started his career selling and distributing newspapers before switching to retailing by buying a floundering Prineville tire shop with just one employee.
Schwab, dubbed the tire king, started transferring ownership of the business to his descendants in 1974, according to the Oregonian, which cited a memoir.
Les Schwab Tire Centers has $1.8 billion in annual revenue, according to a November 2018 interview with The Bulletin. The retailer has more than 450 locations across 10 states, including Washington, Oregon and California. It previously entertained suitors including KKR & Co. and French tire magnate Francois Michelin, the Oregonian reported in 2006.
Runberg said the move to sell does bring up some questions about the future of Les Schwab as a “Central Oregon” company.
“The thing that worries me the most is not that retail impact. What does it mean for the manufacturing arm, for the distribution center? he said. “What does it mean for the HQ? All those are high to mid-wage jobs, professional jobs and careers jobs. Many of them that have been doing their work for decades. That’s the sort of thing we want to pay attention to long term.”
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. In late 2018, Bain Capital agreed to invest in Dealer Tire, and earlier this year Greenbriar Equity Group LP acquired Evans Tire & Service Centers. 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.
Bloomberg News contributed to this report.