Sights set on growth, in Italy and abroad
Still on track. Fintyre, the National tire replacement network (part of an International fund, Bain Capital Private Equity as of last March) has, within a few years, shed its skin in order to meet the challenges of a fragmented market and become a reference point in both domestic and European markets.
Some talk about market fragmentation as a missed opportunity, others view excessive specialization only as an increase in complexity and still others fear any kind of changes. Mauro Pessi, Fintyre's CEO, is certainly not one of these. For the Head of the Italian group specialized in tire distribution, a fragmented market represents an opportunity to gain market shares and “seduce”, through expertise and competence even the smallest retailer; on the other hand, complexity resulting from greater specialization is an opportunity to maximize one’s own potential in terms of service; finally, changes are a decisive and essential element for a healthy business growth. Fintyre’s recent history provides a confirmation of all this.
Within five years, basically starting from the sector’s heavy downturn in 2012, the Seriate (Bergamo) based company has shed its skin to succeed where many competitors have failed, namely to survive the industry’s "long dark night" and awaken fitter than ever before. Today, Fintyre is a strong group with more than 17,000 active customers and a 15% to 22% market share in several business sectors, with an expected total turnover for 2017 in excess of 420 million and wider territorial boundaries. "By the end of this year, Pneusmarket, a company we acquired from Marangoni at the end of 2015, will be completely integrated within the group, just as Franco Gomme whose integration was completed in mid-2016," says Mauro Pessi. In the coming months, we are looking at completing two additional takeovers in Europe. What we are looking for – he continues - are companies that can boast a good economic and financial status, are compatible with our line of business and share our same values. Only a few months ago, in fact, the takeover of Reiff Reifen und Autotechnik, a major independent German retailer, was announced. "Within four years we would like to be able to say that we have a solid European network and a consolidated presence in all the main European markets.
Not bad for a company that has been in business for less than ten years and has grown amidst one of the fiercest recessions the industry has ever had to face and a complete makeover of the retail business!
A complete corporate reorganization
Fintyre rose in 2008 from the ashes of several important Italian tire distributors (Pneuservice'90, Pneufin, Garda Gomme, Pneuservice Agro Industriale, Toscana Pneumatici, Pneumatici F. Giordano, All Pneus Group, All Pneus Toscana, Beba Gomme Piemonte and All Pneus Trentino Alto Adige). The integration, which came following a decision by an Italian investment fund, had the target of setting up Fintyre as the reference name in the national tire distribution sector. However, after a good start, the market’s downturn in 2012 placed the company in the position of having to reinvent itself completely. "In 2011, thanks to the introduction of laws making the use of winter tires during the colder months and in case of snow mandatory, sales soared – Mr. Pessi recalls. The following year, though, due to the concurrent global economic crisis, the industry as a whole experienced a huge drop in sales volumes." The moment was difficult and many of the sector’s players, including distributors, closed down. Not so Fintyre, who had the ability to react immediately, implementing a radical corporate reorganization.
In March 2015, the BlueGemCooperatief UA fund, which had been holding about 32% of the group’s shares since 2009, decided to purchase additional share quotas from other shareholders to reach 90% overall, following which, the new majority shareholder launched an industrial plan with the aim of becoming the national distribution leaders within a couple of years, and then set its sights on the creation of an independent distribution platform at European level. The task of turning words into facts was entrusted to Mauro Pessi.
With his 25 years of experience in the industry, Pessi takes the helm of Fintyre and steers the company through a decisive two years of strategic acquisitions and a new management approach, culminating in the sale of the group to Bain Capital Private Equity, one of the world’s largest investment funds, which took place last March.
Diversified offer and efficiency
Behind the company’s evolution over the last five years, making Fintyre the leading National distributor and one of Europe’s top five, an intense organizational and managerial transformation took place. "From 2012 onwards, the company has changed profoundly as a reaction to that critical period and in response to the changes that affected our reference market," explains Pessi. The sector has undoubtedly changed both in terms of the products offered and distribution networks and has experienced an unprecedented growth in the number of players involved: tires are no longer sold and replaced by tire dealers only, but also by mechanics, car dealers, panel beaters, service stations and other companies that, even if tires do not represent their core business, still consider it essential to offer this kind of service as well. This is happening - he adds - because the final consumer now expects to be able to buy and replace tires even in places other than traditional specialized outlets."
This market transformation is changing the rules of the game for the whole retail sector, forced now to deal with new B2C and B2B sales channels, and to focus on a broader and more competitive range of products and services. "We are among the few distributors around the world to have a portfolio of products that includes virtually all kinds of tires, except for airplanes," says Mauro Pessi. "Furthermore, we also guarantee all our customers, whether large centres or small workshops, a twice-a-day delivery service right across the country." All this has required a profound transformation of our organizational model and a new approach: "new professional and competent figures, some with experience even in other industrial sectors, have been introduced in our management staff, to add further value within the organization - explains Fintyre's CEO. We developed a business model that looks at monitoring performances and reduce costs. Our brand portfolio has expanded to include new types of promotions and different service procedures have been introduced to improve territorial coverage. And finally, logistics has become increasingly significant and a major competitive factor, and for this reason, we are looking at enhancing our relationship with producers through greater efficiency in orders and storage management procedures. In so doing, "concludes Mauro Pessi," we believe we can better serve our customers and aim to become a reference partner at both National and European level."
With over 4 million tires delivered annually, the Fintyre Group is today one of the leading replacement tire distributors on the European market. Created in 2008 by an Italian investment fund following the merger of some of the most important national distribution companies (Pneuservice'90, Pneufin, Garda Gomme, Pneuservice Agro Industriale, Toscana Pneumatici, Pneumatici F. Giordano, All Pneus Group, All Pneus Toscana, Beba Gomme Piemonte and All Pneus Trentino Alto Adige), the group is currently present in the domestic market with 36 outlets, 12 warehouses and a central hub with over 100,000 square metres of covered space and about 500 employees including agents and external staff.
Last March, the entire capital of the company - up to that time in the hands of BlueGemCooperatief UA - was acquired by Bain Capital Private Equity, through its Europe IV fund.