Advance Auto Parts Announces Purchase of the DieHard Brand from Transformco
RALEIGH, N.C. & HOFFMAN ESTATES, Ill.--(BUSINESS WIRE)--Dec. 23, 2019-- Advance Auto Parts, Inc. (NYSE: AAP) has acquired the DieHard brand from Transform Holdco LLC (“Transformco”), for $200 million utilizing cash on hand.
This asset acquisition will give Advance the right to sell DieHard batteries, the most trusted brand in the automotive battery category, and enables Advance to extend the DieHard brand into other automotive and vehicular categories. In addition, the deal allows Transformco to sell DieHard brand batteries through its existing channels pursuant to a supply agreement with Advance. Advance is also granting Transformco an exclusive royalty-free, perpetual license to develop, market, and sell DieHard branded products in non-automotive categories.
“We are excited to acquire global ownership of an iconic American brand. DieHard will help differentiate Advance, drive increased DIY customer traffic and build a unique value proposition for our Professional customers and Independent Carquest partners. DieHard has the highest brand awareness and regard of any automotive battery brand in North America and will enable Advance to build a leadership position within the critical battery category,” said Tom Greco, president and CEO, Advance Auto Parts. “DieHard stands for durability and reliability and we will strengthen and leverage the brand in other battery categories, such as marine and recreational vehicles. We also see opportunities to extend DieHard in other automotive categories. We remain committed to providing our customers with high-quality products and excellent service. The addition of DieHard to our industry leading assortment of national brands, OE parts and owned brands will enable us to differentiate Advance and drive significant long-term shareholder value.”
“DieHard is among the most successful and one of the most widely trusted brands in the auto industry, and we have long believed that the brand has even more potential,” said Peter Boutros, President of Transformco’s Kenmore, Craftsman and DieHard business unit. “DieHard revolutionized the automotive battery category when it launched in 1967, and has continued to be a leader in the category. Advance Auto Parts’ acquisition of this iconic American brand will complement our plans to introduce new DieHard products in non-automotive categories such as sporting goods, lawn and garden, authentic work wear and other exciting new categories.”
About Advance Auto Parts
Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of October 5, 2019, Advance operated 4,891 stores and 152 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. The Company also serves 1,260 independently owned Carquest branded stores across these locations in addition to Mexico, the Bahamas, Turks and Caicos and British Virgin Islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com.
Transform Holdco LLC is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve its members – wherever, whenever and however they want to shop. Transformco is home to Shop Your Way®, a social shopping platform offering members rewards for shopping at Sears, Kmart and other retail partners. Transformco operates through its subsidiaries with full-line and specialty retail stores across the United States.
Certain statements in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Forward-looking statements address future events or developments, and typically use words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “forecast,” “guidance,” “outlook” or “estimate” or similar expressions. These forward-looking statements include, but are not limited to, statements related to the benefits or other effects of the acquisition, statements regarding expected growth and future performance of the Company, and all other statements that are not statements of historical facts. These statements are based upon assessments and assumptions of management in light of historical results and trends, current conditions and potential future developments that often involve judgment, estimates, assumptions and projections. Forward-looking statements reflect current views about the Company's plans, strategies and prospects, which are based on information currently available as of the date of this release. Except as required by law, the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Please refer to the risk factors discussed in "Item 1a. Risk Factors" in the Company's most recent Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings made by the Company with the Securities and Exchange Commission, for additional factors that could materially affect the Company’s actual results. Forward-looking statements are subject to risks and uncertainties, many of which are outside its control, which could cause actual results to differ materially from these statements. Therefore, you should not place undue reliance on those statements.
Source: Advance Auto Parts, Inc.
Advance Auto Parts:
T: (984) 389-7207
E: [email protected]
T: (919) 227-5466
E: [email protected]
T: (847) 286-9036
E: [email protected]
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20191223005397/en/
By Joe Marconi
A few years back, my service advisor, Tony, was trying to sell a customer a new battery. Let’s call this customer Ed Jones. Here’s how the conversation unfolded; “Mr. Jones, my technician completed our 21-point inspection on your vehicle and everything checks out fine. However, I do want to discuss the battery. Your battery was tested with our Midtronics digital battery diagnostic tool, which is a very accurate piece of equipment. Your battery is rated at 575 cold cranking amps, and your battery tested at 300. Would you like me to replace the battery today?” Ed Jones looked at Tony, and three seconds later said, “Thank you for the information. Let me think about it.”
I know Ed very well. The car we were servicing that day was his daughter’s car, who was home from college for the Christmas holiday. Ed’s daughter is in her first year at Plattsburgh University in upstate New York, which is about a five hour drive and near the Canadian border.
I could see the frustration on Tony’s face, so I gave him a little advice; “Tony, ask Mr. Jones who drives the car. After he answers you, ask him what the car is used for. Listen to his answers and then use that information to sell safety and peace of mind, not a battery.”
Five minutes later, Tony reported back to me excited and amazed; “Joe, great advice! He authorized the battery! I guess you knew he would buy the battery with the right questions?” I replied, “You were trying to sell Ed Jones a battery by pointing out the technical process we use to determine the health of the battery. What you need to do is reach the customer on an emotional level. The questions I recommended you ask made him realize that it’s the welfare of his daughter he was really buying, not a battery.”
Now, let’s clarify something. Tony didn’t say anything wrong with his sales presentation. But he got the process backwards. He was leading with logic. If you’re trying to sell something by using logic alone, you are going to struggle. People make buying decisions based on emotions. To make a sale, you need to connect with the part of the brain where emotions reside, and then back it up with logic.
Bombarding the customer first with facts and features tends to confuse the brain as it tries to make sense out what you are saying. That can be difficult because the technical information is usually not fully understood by the customer and the confusion usually results in the customer saying, “No.”
Let’s review the conversation when Tony asked the right questions; “Mr. Jones, who drives this car?” Ed replied, “My Daughter.” Tony continued, “And what does she use the car for?” Ed replied, “She uses it to go college at Plattsburgh. She’s home for the holidays and goes back to school on Monday.” At that point, Tony realized why I urged him to ask those questions, and continued with, “So, your daughter drives this car back to college, and leaves on Monday. She goes to Plattsburgh, which is near the Canadian border. Mr. Jones, it’s wintertime and that’s a long, lonely drive. Her battery tested weak and may fail without warning. For peace of mind and your daughter’s safety, wouldn’t it be in her best interest to replace the battery before she leaves?” Ed now makes the emotional decision, “Yes.”
Here’s the bottom line. First, know your customer. Build rapport during the write up process and find out all the details of why the car was brought in for service. Second, tone down the technical side of what you do. That’s not to say it’s not important. But, before you give the technical facts, reach your client on an emotional level. Ask questions to find out as much as you can about the customer, and then direct the conversation to the reasons why what you are trying to sell will benefit the well-being of the customer and/or the customer’s family.
Remember, decisions are easier to make when it has meaning to them or a family member. In Ed’s case, not replacing the battery would have been unsettling to him. Tony’s recommendation to replace the battery is perceived as the right decision because it promotes the safety and well-being of his daughter.
Humans are driven by feelings and make emotional decisions, then justify it with logic. Next time you are trying to sell anything to a customer, ask yourself, “Why should the customer buy what I am trying to sell?” The answer may surprise you.
This story was originally published by Joe Marconi in Ratchet+Wrench on November 1st, 2019
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Who is the supplier of that brand to you?
What are the battery series that are available in that brand, and what are the warranties?
Who manufactures your choice of battery?
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If you have a repair shop business in New York State that you are looking to sell, please let me know. I will keep this strictly confidential. Criteria required, shops with 6 plus bays. Other details to be explained. Please email me: [email protected]
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According to Zip Recruiter, tech pay on average is about $41,000 per year. Is this an issue? I know many of you pay more than average, but do you think that we need to increase tech pay in order to attract more people to the auto repair industry. One other thing to consider, the shop and shop owner needs to be profitable and make the money first in order to pay anyone a decent wage.