21 German First Stop outlets threatened with closure

The First Stop network began with the opening of two service centres in the UK in 1994, and over the following two decades grew into a pan-European retail chain boasting almost 2,000 outlets in 25 countries. On its website, First Stop says this “success story continues”, however in one market the network’s presence may soon suffer a hefty setback. Our German sister magazine Neue Reifenzeitung reports that First Stop has commenced a restructuring and consolidation programme in Germany, and in a worst case scenario this could lead to the closure of up to 21 Bridgestone-owned First Stop centres in the country – out of a total of 64 – before the end of this year. This potential slashing of numbers follows the closure of five outlets in 2013. Neue Reifenzeitung notes that at present no concrete plans regarding branch closures have been announced, and it is not yet clear which 21 of the 64 outlets are threatened.

An internal solution is currently being sought by First Stop’s German head office; talk is of a “management buyout” or offering the 21 outlets for acquisition by independent First Stop franchise partners. A further option is to sell the outlets to independent tyre dealers. Closing the 21 branches is seen as a last resort move, and this would take place before the end of the year.

While First Stop has not named which of its branches are threatened with closure, those with knowledge of the situation say all 21 centres on the list are outlets that have constantly operated in the red during the last two to three years and look likely to continue doing so in the near future. A total of five factors are said to negatively influence the centres’ ongoing viability: Site profitability, costs (staff, rent etc), the centre’s location, its development potential and the site’s strategic significance.

Bridgestone, like other tyre majors, recognises the advantages of working with independent partners rather than operating company-owned outlets. It considers working from an existing or new location with a First Stop partner the better solution; First Stop Germany managing director Dr. Urban Uttenweiler told Neue Reifenzeitung in December 2012 that acting as tyre dealer is always the second-best alternative for a tyre major. Bridgestone and First Stop only invests in a company-run outlet when it cannot find a suitable partner for a particular site.

Talks over potential solutions to the “up to 21 outlets” are paired with discussions with the First Stop works council over plans should the worst case scenario occur.