Blackcircles hinting at closer Tesco connection

Blackcircles.com managing director Michael Welch has hinted that company may employ a closer relationship with leading supermarket Tesco as one way of moving towards its goal of £100 million (around 10 per cent of the UK market) in the next five year. Welch revealed the plans in an interview with The Telegraph published on 26 February, which also gave details of the guidance the company has received from a number of ex-Tesco executives and particularly former CEO Sir Terry Leahy.

As well as being full of advice, Sir Terry has put his money where his mouth is, buying a 25 per cent stake in Blackcircles in 2011 – a move which no-doubt brings with it an incentive for the tyre business to listen to the wisdom of its mentor.

According to the Telegraph interview, the business has enjoyed good sales growth and started to become profitable in 2004. However, before the ex-Tesco directors got involved Welch and his team are said to have ‘plateaued’ in what he refers to as the “boring” route of expansion: “Every year we were growing 30 per cent, but in 2007 to 2009 that wasn’t exceptional. Everyone you spoke to seemed to be doing that, raising money through private equity, and asking why we weren’t.”

‘Negotiations underway’ to extend Tesco relationship

A big change came in 2010 when the company began working with Tesco, under the “Tesco Tyres” name. And the latest is that there are “negotiations underway” to extend this relationship, but Welch isn’t giving any more away about exactly what this means yet. However, the hint is that it “could involve Tesco shoppers being able to engage with us in the stores”.