Business is Booming for Big O Tires
December 25, 2015
Written By Adam Buckallew
Things are rolling right along for MFA Oil’s Big O Tires stores, which set records for sales and profitability in 2015. The company’s 15 stores reported sales exceeding $26.4 million, a 25 percent increase over last year. Net income totaled $1.6 million, which eclipsed the previous year’s record of $983,000.
“We expect our sales numbers to keep trending upward for at least the next two to three years,” says Rusty Coats, MFA Oil director of retail tire operations. “The average age of U.S. vehicles is now 11-and-a-half years old and the average number of miles driven per year continues to grow. That means more repairs and tire replacements for those vehicles and that provides good opportunity for us.”
Buyout of BORE/MPC Joint Venture
In July, BORE/MPC LLC, the joint venture between MFA Oil Company and Big O Tires, announced MFA Oil would purchase Big O Tires’ interest in the partnership.
Formed in 1998, BORE/MPC is the Big O Tires franchisee that owns and operates the Missouri Big O Tires stores in Branson, Camdenton, Columbia, Hollister, Jefferson City, Nixa, Osage Beach, Rolla, Springfield and St. Roberts and in Bentonville, Ark. and Springdale, Ark.
“This is a good deal for MFA Oil Company,” says Coats. “Not only was the cost of the buyout favorable, but the single company ownership allows us to be quicker and more flexible in our business decisions.”
Coats says MFA Oil and its Big O Tires operations team will be able to work more efficiently in opening new stores now that MFA Oil no longer has to wait on agreement from the joint venture.
“There were too many levels of approval to go through when it was a joint venture,” says Coats. “We recently closed on our newest store site in Branson and completed a full renovation of the property in a matter of weeks. With the joint venture, that would have taken six months.”
New Store in Arkansas
MFA Oil expects to open its 16th Big O Tires store in Fayetteville, Ark. in May 2016. The newest store will be located within two miles of the University of Arkansas campus. In the future, MFA Oil plans on adding about two Big O Tires stores per year.
“As Big O Tires continues to look for opportunities to expand, our buyout of the BORE/MPC joint venture will make that process, and others, more efficient,” says Mark Fenner, MFA Oil president and CEO. “We’re very fortunate to have Rusty leading the Big O Tires team with his 40-plus years of experience in the tire and automotive repair business.”