Comment: A change will do you good?

As the July issue of Tyres & Accessories went to press, Kwik Fit Group announced the arrival of Stapleton's boss Kenji Murai as its new group head. Of course we are all aware of the fact that Itochu now owns both Stapleton’s and Kwik Fit (who could have missed all the coverage reporting the purchase from 2 March onwards?); and it is of course natural that a company will want to have their own people integrated into a business they have purchased (and congratulations and best wishes to the new boss); but there are at least two reasons why this news will raise some eyebrows.

Firstly it appears Itochu’s man Murai is now head of both the UK’s largest tyre wholesale operation and Britain’s biggest tyre retailer (with no contradictory comment from Itochu as yet received), giving the Japanese conglomerate unprecedented buying and selling power. In fact, such is the scale of Itochu-owned retail and wholesale coverage in the UK, some would ask if it is too much. Exclude the Kwik-Fit purchase and Itochu controls some 131 retail branches in the UK. Add in Kwik-Fit’s 686 (it was 676 at the time of the purchase, but the firm reported at the end of May that it plans to open 10 more depots this year) and the firm has 817 dots on the map across all its different retail brands. And that’s just retail.

When you look at the wholesale/distribution side of things, Itochu’s presence is arguably more saturated, with Kwik-Fit’s enormous £10 million Corby-based National Distribution Centre and Stapleton’s recently opened Birmingham super-hub. Both were the best efforts of those involved to improve the efficiency of the two large tyre business’ operations. But now they are owned by the same company and that both logistics centres are designed to feed out tyres nationally begs the question as to whether or not the management will continue to see them both as wholly necessary.

Back on the retail side, while a certain amount of cross-pollenisation could see some branches change their stripes to another brand in the Itochu-owned tyre retail portfolio, what will a company that has just spent £637 million on Stapleton’s and further millions on North Eastern Tyres & Exhausts do with locations or indeed warehouses that no-longer fit into either its retail or wholesale strategies?

The second reason some will be surprised about the news of the latest appointment is because the company has a) always implied that the businesses will be run in parallel as two separate entities and b) because company representatives specifically said that chief executive officer Ian Fraser was staying. Tyres & Accessories asked this question back in March: apparently a lot can happen in a few months. Just a day after Itochu announced that it had officially completed its acquisition of the fast fit giant on 30 June, the corporation announced the departure of Fraser and group finance director Michael Healy.

It certainly is a change, but will the change do the wider market (or indeed the firms involved) any good? Some might speculate that Murai’s appointment is indicative of a strengthening of ties between Kwik Fit and the wholesaler. Right now there are far more questions than answers.

Look out for further coverage online at tyrepress.com and in future editions of Tyres & Accessories.

Related news:

• Stapleton’s MD Murai now in charge at Kwik Fit
• Itochu officially completes Kwik Fit Group purchase
• EC approves Kwik-Fit acquisition; 10 new centres planned for this year
• Itochu’s Kwik-Fit and Stapleton’s to be run as separate entities
• Kwik-Fit confirms Itochu is new owner