Myers Tire Supply adapting to market through streamlining, cost management

CLEVELAND—Myers Industries Inc.'s ongoing revamp of its Myers Tire Supply distribution business is designed to make the firm more efficient and responsive to customers, while also controlling costs internally.

That was the message delivered by Chris DuPaul, group president of Myers Industries' distribution segment—which includes Myers Tire Supply—since November 2017.

"We've changed every part of our business," he told a gathering of trade media earlier this year during the company's annual sales conference/supplier fair in Cleveland. "It wasn't a top-line sales problem...it wasn't a cost problem or a distribution problem.

"…Given where the market is going,…we asked ourselves, 'What do we need to do differently in terms of how we go to market?…What do we need to change about how we bring our products to market?…How do we need to think differently about where we're going to grow?'"

DuPaul was addressing a realignment of the business' commercial sales structure that was made public in March in an 8K filing with the Securities and Exchange Commission. That filing outlined plans to trim the distribution business' workforce in line with restructuring efforts designed to yield annualized benefits of $5 million to $7 million after calendar year 2019.

"As the tire-repair and retread industry continues to evolve, Myers Industries is working on transforming its distribution business," Monica Vinay, vice president of investor relations, said at that time. "We are refining our strategy to invest more in our growth channels, better serve our customers and create an even brighter future for our people."

In the meeting with the trade media, DuPaul sought to elaborate on those comments, saying Myers is taking a "fundamentally different approach to doing business."

"How do we best serve our customers?" he asked. "What do I need to do to bring this to market?"

Answering his own question, he referenced the company's suppliers.

"You don't do it alone," he said, noting there's a difference between a vendor and a partner. "You have to have strong partners."

Over the past three to six months Myers started to be more selective with its supplier partners with an increasingly critical eye on growing the business together.

One of the key initiatives of the realignment was building a more robust e-commerce platform, DuPaul said, noting the goal in having a strong online presence is to support the traditional distribution business model, not replace it.

"The opportunities ahead of us are to improve the use of the platform, drive knowledge content, etc.," he said. "We want to both build the capabilities of the platform and the training of our people, so that our sales reps…can drive that platform as an additional tool in their sandbox."

That platform allows customers to have 24/7 access to Myers' complete portfolio of 14,000-plus SKUs, he noted, for fulfilling needs between sales rep visits.

From a nuts-and-bolts perspective, DuPaul said the business' reorganization reduced the layers of field leadership, streamlining communications between customers and management.

The company also restructured the field sales team's compensation package while trimming the sales force by an as-yet undisclosed number of positions.

When people see a company is restructuring, he said, quite often outsiders ask, "Is there a problem?"

"The way I think of SG&A (sales, general and administrative) spending," he continued, "is every dollar we spend on our cost structure should be something that's going to drive growth."

DuPaul noted in his comments that Myers' fourth fiscal 2018 quarter showed growth for the first time in many periods. That growth continued in the first quarter of fiscal 2019 with $400,000 in additional sales versus the 2018 quarter.

The company attributed the growth both to higher sales volume and higher pricing.