Blackcircles.com has announced a growth in revenue of 20 per cent to £27.8 million (versus £23.2 million in 2012). The online tyre retailer said that the latest full year results mean its revenues have a compound annual growth rate of 22 per cent since 2008. EBITDA increased to £1 million. The results follow the announcement of former Tesco chief executive Sir Terry Leahy’s appointment to the Blackcircles.com board.
Former Tesco chief executive Sir Terry Leahy has been appointed to the board of Blackcircles.com. Leahy has been a shareholder in the online tyre business for around six years and his stake in Blackcircles is now said to be 25 per cent. In his new role, Leahy will work with company founder and chief executive Mike Welch and chairman Graeme Bisset to identify and implement new means of financing ongoing growth within the business. One option that Leahy may be closely involved in is an IPO.
Blackcircles.com has become the latest tyre firm to share its experience of how the adoption of tyre labelling is (or isn’t) affecting the purchase choices motorists are making. According to Blackcircles’ sales data, consumers are definitely using the EU Tyre Labels when deciding which tyres to purchase. Additionally, data collated by Blackcircles.com suggests shows that tyre safety is of more importance to motorists than fuel efficiency.
The first “Click & Fit” tyre service has launched at Tesco in Bletchley. The service allows customers to order tyres and make a fitting appointment through Tesco’s tyre partner Blackcircles’s website, before dropping off their car at a “Pit Stop” fitting bay at the supermarket. Tesco told local news source the Milton Keynes Citizen that customers could expect discounted tyre prices and Clubcard reward scheme points as extra incentives for using the service. An idea in the works since the companies partnered on the Tesco-Tyres.com website in January 2011, the potential for rolling out this model nationwide is clear, given the supermarket giant’s UK prominence.
In addition to announcing a 30 per cent rise in sales last year, Blackcircles.com appears set to expand across the Channel in the near future. Company founder and managing director Mike Welch states the online retailer aims to grow market share both in the UK and internationally and claims that Blackcircles.com is now in talks with parties in Central Europe; if all goes to plan, an announcement regarding a partnership or acquisition will be made before the end of this year.
Blackcircles.com managing director Michael Welch has hinted that company may employ a closer relationship with leading supermarket Tesco as one way of moving towards its goal of £100 million (around 10 per cent of the UK market) in the next five year. Welch revealed the plans in an interview with The Telegraph published on 26 February, which also gave details of the guidance the company has received from a number of ex-Tesco executives and particularly former CEO Sir Terry Leahy.
Black Circles, the Peebles-based online tyre retailer established by Michael Welch, turned a profit in 2011 results. 10 years after it began trading, Blackcircles reportedly made a retained profit of £2295, according to The Herald newspaper.
According to The Independent, former Tesco chief executive Sir Terry Leahy is providing “mentoring services on an ad hoc basis” to Blackcircles.com. Leahy, who the newspaper describes as being an “acquaintance” of Blackcircles.com managing director Mike Welch, also disclosed that he owns a stake in the online tyre retailer. Yet while admitting being a shareholder for some three years now, Leahy stressed to the newspaper he had “no hand” in orchestrating the Tesco Tyres partnership between Blackcircles.com and the supermarket giant. Further distancing himself from potential mutterings over conflicts of interest, Sir Terry reports he informed Tesco chairman David Reid upon acquiring his share in Blackcircles.
Following a gestation period of some five years, a new retail venture entered the UK tyre market in January 2011. Blackcircles.com has announced the launch of Tesco-Tyres.com in partnership with Britain’s leading retailer, a venture that offers access to Tesco’s massive nationwide customer base – including its 13 million Clubcard holders. Speaking with Tyres & Accessories, Blackcircles.com founder and managing director Mike Welch reflects on what the realisation of this long-held goal means for his company and what the future for Blackcircles may look like.
Persistence has paid off for Blackcircles.com. The online tyre specialist has been courting Tesco, Britain’s largest retailer, for around three years and the two companies have now finally reached an agreement under which Blackcircles.com will sell its products through a Tesco operated website. The Tesco tyre site is expected to go live in February; Blackcircles.com’s managing director and founder Mike Welch – who in former times packed shelves for the retail giant – commented that Tesco’s marketing clout “will be great for us.”
In January this year, online tyre retailer continued its strategy of merging traditional and online marketing methods by delivering promotional material to 20 Tesco Petrol Stations around the UK. According to the e-tailer’s website, the company’ s communications and promotion manager covered over 1000 miles in five days, visiting selected Tesco stores. His objective was to introduce the company to Tesco Staff, while delivering A5 fliers, putting up posters and checking air pump advertising fascias which had been put up the previous week.
Blackcircles.com is aiming to increase its garage network by 30 per cent by the end of 2009, adding as many as 400 garages. Announcing the news the company vowed to help independent garages “fight back”, saying it offers “additional revenue, customer footfall and national marketing, helping [independents] compete with major high street brands.”
Blackcircles.com has appointed two new senior managers as part of the company’s ongoing expansion plans. The Peebles-based business has recruited Alan Littlewood as head of network and supply and Peter Nowell as head of commercial operations. The appointments follow the announcement of a major partnership deal with the RAC, enabling Blackcircles.com to sell tyres directly to the motoring club’s seven million members through a new venture, RAC Tyres.
Peter Nowell will be responsible for developing mutually beneficial relationships with Blackcircles.com’s suppliers. He has previously held senior marketing roles at both Kwik-Fit and ATS Euromaster. Alan Littlewood joins Blackcircles.com from car dealership operator Pendragon Plc. His role will be to expand the company’s network of franchised garages and develop its servicing offer through its partnership with Unipart.
On April 22 the European Parliament approved – by a large majority – a number of draft measures that will see tyre performance in fuel efficiency, wet grip and noise levels explained on a standardised label attached to new tyres. The new rating system, pencilled in for implementation by late 2012, will use a scale similar to that utilised on the EU Energy Label or “fridge mark” as it has affectionately been dubbed.
Now that the tyre labelling measures first published in November have been approved, it has been proposed that tyres generating particularly low levels of noise be given an extra insignia, imprinted on the outer sidewall. Another proposed change is an upping of the level of information provided in tyre advertisements – the aim is to better inform consumers and provide a stimulus for the development of safer and more environmentally friendly tyres. However, specific details of the labelling scheme have yet to be finalised, and the draft text still awaits the scrutiny of the Council of Ministers, the body representing the 27 EU member states.
Leading motoring organisation RAC has teamed up with Blackcircles.com to create RAC Tyres, an online tyre retail portal offering “hassle free online tyre service” to RAC’s seven million members and any visitors to the RAC website. Blackcircles.com will power the motoring organisation’s new tyre retail operation, RAC Tyres (accessible at both www.rac.co.uk and www.ractyres.co.uk). The service will enable visitors to order tyres through the website and have them fitted at any of the over 900 garages in the Blackcircles network.
Announcing the news, company representatives described the agreement as a “landmark deal” and pointed out that the move follows a period of sustained growth for Blackcircles.com. According to an interview with the Financial Times published in early April, company founder Mike Welch believes the recession could benefit Blackcircles as customers seek a lower cost tyre alternative.
Blackcircles.com has grown to a turnover of in excess of £10 million since it was launched in 2001. In the earlier report, FT quoted Welch as saying sales were as much as 80 per cent up year-on-year. While year-on-year sales growth is currently quoted at 60 per cent it remains nonetheless impressive.
