A Little Bit Different: Vogue Follows Its Own Path in Industry

Founded in 1914, Vogue Tyre has always been a little different, a bit more upscale. Best known as “that Cadillac tyre,” Vogue catered to top-end cars and sold what was touted as the industry’s first whitewall, a stark contrast to the day’s solid black tyres. Later, it added its now trademark white/gold sidewall stripes.

A family-owned company then as it is now, Vogue has never aspired to be a major tyre player, but rather wants to be known as a quality company with quality people (180 of them) offering quality products. The Mt. Prospect, Illinois-based Vogue is also a quality customer, celebrating its 70th anniversary as a Goodyear customer – and as Goodyear’s oldest private brand account.

Today, Vogue is headed by Greg Hathcock, president, and has broadened its product screen to include custom wheels, performance products and vehicle trim. Tyres remain some 45 per cent of Vogue’s business. While car dealers remain Vogue’s primary target market, tyre dealers are becoming a larger part of the picture.

Tire Review sat down with Hathcock recently to discuss Vogue’s plans for the future.

Talk about where you are with the tyre dealer segment and where you see that heading in the future.

“Well, we are always looking to do more. You need to be careful that you are reasonable in your approach and the distribution you have set up is a positive arrangement for all of the parties involved. You want your distributors to be successful with your product so that they can deliver the kind of service and support you need for the end user. We try to be careful in that. We want our distribution to be as thorough and pervasive as possible, and we try to reduce redundancy as much as possible. In an ideal world you wouldn’t have any redundancy, I guess, but that gets difficult at times. So we need to make sure that as a business proposition, it does make sense for all of the parties involved rather than just pumping out as much product as we can. That said, we are always looking for opportunities to increase business and have more complete coverage in all markets without overloading them or taking away business from partners who have done a nice job for us.”

You do sell currently to a number of select tyre dealers. Is there a prototypical tyre dealer customer for Vogue?

“Not necessarily. From market to market the opportunities will vary. You’ll have some markets where you’ll have a dealer like Belle Tire who does a nice job in retail, or a Discount Tire or Les Schwab. There are other markets where it is more appropriate to have a wholesaler who can sell to the smaller independents. They are an important part of our business, as well. Part of it is driven by opportunity and what infrastructure exists – as long as you can provide good retail distribution and service in the market. Either way works out.”

Are you approaching things on a territorial basis? Is there a parameter you look for?

“Is there a parameter when we are considering a new distributor? Sure. We have to look at things like making sure we’re not creating redundant distribution. We want people who are going to service the product, honor the warranty and so forth. A big part of our product is the warranty that comes with it and we want to make sure that’s done correctly. Some dealers are better set up to do that than others. You need to take that into account.”

In terms of your wheel and performance products, is your distribution much the same way, or are those programs being held for car dealers?

“We only sell wheels to car dealers. We have found that when it comes to wheels and performance products, tyre retailers and car dealers have different expectations in terms of margin, so if we had the same product available for both the car dealership model may not be viable. So we have resisted selling wheels to retail stores.

With your car dealer business, what are you finding from car dealers about how they are treating tyre sales? Are they becoming more aggressive with it or less aggressive?

“They are all different. I think car dealers are becoming much more serious about selling tyres. I think they see the opportunity in customer retention and selling other services and products that come with that retention. I think, to generalise, I do see that continuing to be a growing part of their business. Vogue has been selling tyres to car dealers for years and stressing those same kinds of benefits. It makes perfect sense to us.”

Within the car dealer arena, is there a certain type of car dealer you look to align with?

“We have two different programs. We have the direct program were the dealer purchases the inventory and then retails it and services it. And then we have the custom center program where we run a turnkey aftermarket program in the dealership with our people, our equipment and our inventory. So there’s two different models there. Obviously we need certain volume levels to support the custom center program because of the expense we incur by running an operation there, but virtually any dealership can be a direct dealer.

“In terms of a specific type of dealer, it’s been more Cadillac in part because we have been with that brand longer. We’ve also have been in several Lincoln and Chevrolet dealerships over the years. It all depends on how well you can get all of the different parts of the dealership working together with you to generate the business you need to support the infrastructure you have in place.

“We have dealers who have GMC, Hummer, Buick, Chevrolet, Pontiac, etc. Every different franchise in a dealership offers us more opportunities to sell product and make the dealership money. Hummer being paired with Cadillac dealerships is common and it’s been great for us. But we’re not necessarily tied to any one badge. As it works out we have been more successful with Cadillac, but we’d like to diversify into other brands as well and we’re working on that.”

Talk about your relationship with Goodyear.

“2008 marks our 70th anniversary with Goodyear. The big 7-0. We were their first private brand customer. We’re proud of that. I’ve been with the company since 1991 and right now we have the most projects in development with Goodyear than we have had since I came on board. So we’re very excited about 2008 and all of the opportunities we have. The more new products you have, the more niches you can fill on both the new car channel and the tyre dealer channel.”

During your last new product introduction, you said one of the reasons for that product was to fill some voids in your offering, that you had feedback from the field that you needed that tyre to meet opportunities. Are you finding that more and more, and is that because of the propensity of the OEMs to have broader SKUs?

“What we’re finding is that it’s not necessarily driven by the OEMs anymore. The tyre we talked about, the 245/40R20, was kind of in that market segment for bigger wheel sizes and we wanted a 20-inch tyre for both so that was an obvious product niche. Some of these other projects are the same kind of situations where they really are not driven by the OEMs, but more by pure aftermarket needs and opportunities. We’re trying to fill in niches where customers with a mid-sized vehicle cannot fit a Vogue that we built for a full-sized Cadillac. We think that these new products will bring a lot of incremental opportunities for us and our distributors.”

Will most of your focus be on cars vs. light truck/SUV?

“We currently do not have any light truck tyres in development. That business for everyone has slowed down. It is still a very viable part of the business, but right now we are building our passenger car business.”

Vogue is not a tyre for everybody, but is there a vision on your part that maybe Vogue could be a bit broader, with more products and more dealers instead of being somewhat exclusive and limited?

“Do I think we can take our brand and create new products – whether it’s a new sidewall design or different sizes or different speed ratings – and broaden our appeal to different markets? Yes, and those are some of the projects we’re working on now – to take the Vogue name and have it not just be white/gold stripe tyres. Maybe there is something else we can do and still leverage the equity in the brand and appeal to other consumers.

“Maybe there are people who don’t want whitewalls and one of our goals is to appeal to them, to have a premium tyre they will aspire to have on their cars. And that is different for us, but I think that’s a growth opportunity for us. There are some car dealerships out there that don’t want to sell whitewalls. We have a very strong brand and we think we can use that to branch into other areas.”

Is there any thought to make a Vogue private label brand? Maybe a broader approach to the market, but without the Vogue name on it – a private label for a private label?

“We’re certainly open to new ideas. With the way manufacturers are approaching private label tyres these days it might be tough to do something like that, but maybe so. I don’t know how you would. Unless you’re high-end, it’s hard to give dealers the margins they need and be competitive with everything coming in from offshore.”

Another way to look at it is, are you looking to broaden the business in different fashions or are you looking to build the business with a traditional approach?

“I think it makes more sense for us to focus on the things we know and stay in the premium end of the market. That is probably the best way to go. That said, there is a lot of opportunity for growth there for us without having to change our distribution infrastructure. With the sales force we have and the business model with the custom centres and the tyre dealer distribution we have now, we think we can grow within that framework. We just need to have the right kind of product. I’m not sure going down market works with what we have set up. It’s really about finding out what the market wants.”

How much feedback and help do you get from Goodyear in terms of where market opportunities might be?

“We get information from a variety of sources. We’ll talk to our tyre dealers, we’ll talk to car dealer customers, we’ll look at independent sources of data to see what cars are coming with what tyres. We’ll run things by Goodyear and consult with them and get their feedback because they obviously have some ideas of market trends. It’s really a combination of things.

“Goodyear is really a great partner of ours. They give us a lot of support and we’re very fortunate to have that kind of support.” (Tire Review/Akron)