Sam Winston, the Reluctant Tire Pitchman : Retailing: A familiar face from his TV commercials, the company’s owner shuns the spotlight and declines interviews.
Car-crazy California is naturally the nation’s biggest tire market, where hundreds of dealers vie for a chunk of the state’s roughly $1.3 billion in annual replacement-tire sales. Yet even in this crowd, one man is more familiar than most.
He is Sam Winston, the chairman, majority owner and lead pitchman of Winston Tire Co., which operates 158 stores in California.
Winston has become a household name after years of starring in his company’s TV commercials (“Put Sams on Your Car!”). His face also adorns Winston Tire’s newspaper ads (“Sam Introduces His Brand-New Signature Tire!”), and his name is on most of the tires he sells.
Yet in spite of his high commercial profile, Sam Moore Winston, 50, avoids the spotlight for himself and his Burbank-based company, which is technically called Oliver & Winston Inc.--the late Ray Oliver was Sam’s stepfather and the company’s co-founder--but does business under the name Winston Tire.
Because it’s closely held, financial information about Winston Tire is not publicly available. Winston and his executives routinely reject interviews with the media. He declined several such requests by The Times, and many of his ex-employees refused to talk about him publicly.
“He’s a very private person,” said Jean Craig, a principal of Kresser Craig Inc., Winston Tire’s advertising agency since 1982. Winston “doesn’t particularly like” being the TV spokesman for Winston Tire, but does it because he knows that “he’s a recognized personality” who attracts “enormous attention and keeps their awareness high,” Craig said.
Many of Winston’s rivals know him only by his TV appearances but respect him nonetheless. “A good, clean competitor,” said Don Carr, chief executive of 4day Tire Stores, an Irvine-based chain.
The portrait of Winston that emerges from interviews, public records and Winston Tire documents obtained by The Times shows that his company, founded in 1962, now garners about $120 million in annual revenue, probably making him the largest independent tire dealer in California.
For the past four years, in The Times’ Consumer Trend Analysis survey of 6,000 respondents annually in Los Angeles and Orange counties, Winston Tire has ranked third behind Goodyear Tire & Rubber Co. stores and the Price Club as the place where people last purchased tires. In 1990, 6.5% of the 2,000 who had bought tires in the previous year said they last bought them at Winston Tire. Goodyear was 10.6%, Price Club 8.3%.
But it is a position the Tennessee-born Winston is prepared to relinquish. In an internal memo in November, he said he had been talking since 1988 to “various companies” about buying Winston Tire. He did not mention any names or proposals.
Sources said the price under discussion with the potential buyers was upward of $40 million, a rich price considering Winston Tire’s modest profitability.
The company’s annual profits in the late 1980s were roughly $2 million to $3 million, or 2 to 3 cents per $1 of sales, according to one source who has seen company financial data. This is not unusual in an industry known for low profit margins. Still, the earnings indicated that Winston wanted a buyer to pay up to 20 times Winston Tire’s profits--a hefty multiple.
Winston’s memo said he does not plan to entertain any other purchase bids “for the next 2- to 3-year period.” Selling the company would raise the question of whether he would be willing to remain associated with the new owners--and keep appearing in their ads.
Winston’s competitors concede that those TV ads have been a crucial factor in Winston Tire’s growth.
An executive at one Southern California tire chain said, “The basic reason for Winston’s success is that he was one of the original tire dealers that used the electronic media for his message of quality at a good price.
“It’s not that his values are any greater than mine or anyone else’s,” the competitor said, “but it’s a perception that started a long time ago.”
Associates say Winston is as casual, mild-mannered and unostentatious as he appears to be in his ads, even though his estimated 90% stake in Winston Tire is worth tens of millions of dollars. He and other Winston Tire executives often eschew ties at work, as well as fancy jewelry.
But Winston does not deprive himself of all the fruits of success. He owns a 1983 Rolls-Royce and formerly drove a Ferrari. He owns the property of at least three Winston Tire dealerships--in Van Nuys, Fullerton and Bakersfield--along with a million-dollar home in Rancho Santa Fe and a condominium in Beverly Hills, records show.
Winston enjoys big-game hunting, and he directs his tire empire from a headquarters office filled with the stuffed heads of bighorn sheep, bears and other animals he has brought back from Africa and other locales.
But it is Winston’s fellow-next-door demeanor that his advertising firm tries to exploit.
“The ad campaign is absolutely rooted in the personality of Sam Winston,” Craig said. “He’s a sincere, gentle, people-oriented, somewhat self-effacing man.”
One ad has Winston working late when the office cleaning lady stops by. She tells him that if the business isn’t broken, don’t fix it, and he takes the advice. “There is a kind of good-natured humility that comes through in the advertising, and we try to capture and capitalize on that,” Craig said.
After his father died when Winston was a teen-ager, Winston followed his mother to the Los Angeles area. She married Ray Oliver, and the two men began selling tires wholesale in 1962. They opened their first retail store in Glendale two years later, selling Delta brand tires. At the same time, Winston attended USC, receiving a bachelor’s degree in economics in 1964.
The business grew slowly at first. Winston Tire opened only four more outlets in the next four years. It expanded rapidly during the next two decades. He introduced his private label tire, the Winston, in 1971 and began adding services such as brake and alignment repairs in 1976.
Most of Winston’s tires are made by Kelly-Springfield Tire Co., a unit of Goodyear that specializes in making private-label tires. (Winston also sells a Japanese high-performance tire, the Toyo.)
Today, Winston Tire and most other tire retailers are heavily involved in providing extra services, which typically carry higher profit margins than tires.
As Winston Tire’s figures show, the services haven’t been strong enough to create a surge in the company’s overall earnings. But the company apparently decided that by boosting the services available at each store, it could generate higher sales without having to continually open new stores.
Winston Tire’s expansion has indeed slowed. Another Sam Winston memo shows that Winston Tire had 150 stores in 1985, only eight fewer outlets than today.
Winston Tire also wholesales tires, selling excess Winstons to service stations, car dealers and other firms. Winston Tire says it sells its tires to the public at the same prices it charges the gas stations--”wholesale prices, every tire, every day.”
Every tire retailer is looking for an edge these days because the market is sluggish. Observers speculate that this could help explain Winston’s taking his company off the auction block.
Excess capacity at the manufacturing level has left some producers, such as Goodyear and Groupe Michelin of France, with major losses, forcing them to lay off thousands of workers and to close idle facilities. The situation reflects sluggish new-car sales and the overall economic slowdown. Many people are delaying the purchase of replacement tires for their cars or are buying less-expensive tires. The trend has translated into severe price-cutting at the retail level.
That doesn’t mean Winston Tire is necessarily worse off than others. Carr of 4day Tire said the manufacturers’ woes mean that retailers can buy tires from the producers at cheaper prices.
Even if 4day, Winston and others cut their prices, their profit margins from tire sales can often remain intact, Carr said. And protecting that margin is crucial because it averages a paltry 1.5% or so throughout the industry, he said.
Winston Tire often dictates price levels to its competitors, said Phil Welch, marketing director of Dob’s Tire & Auto Centers, a Ventura-based operator of 62 stores.
With so many motorists watching Sam Winston’s pitches on TV, “we watch closely Winston’s pricing to make sure our prices are in line,” Welch said.
THE LOCAL TIRE MARKET A survey of consumers in Los Angeles and Orange counties during 1990 showed that, of those who reported buying tires in the preceeding 12 months, their places of most-recent purchase were as follows:
Dealer Percentage Goodyear Tire 10.6% Price Club 8.3% Winston Tire 6.5% Sears Roebuck 4.6% Discount Tire 4.0% Firestone 4.0%
Source: Los Angeles Times marketing survey of 6,000 households.
WINSTON AT A GLANCE Start: Sam Winston and stepfather set up shop in Los Angeles area in 1962. Growth: He now runs 158 stores in California; annual sales estimated at $120 million or more. Fame: Winston becomes household name doing TV ads, but keeps Winston Tire private. Future: He tries to sell company in 1988-1990 for at least $40 million. No takers. Now it’s off auction block.
