MIKE Welch, the founder of online tyre fitter Blackcircles.com, is targeting revenues of £100 million within the next five years following the sale of the Peebles-based business to French group Michelin.
In his first interview since sealing the £50m deal in May, the entrepreneur said the business was “absolutely flying”, with sales set to reach between £35m and £40m this year.
He told Scotland on Sunday: “We will have one of our best-performing years in the last ten years, as this whole process has focused the mind and made everybody really get a grip on what matters, which is the customer.”
Revenues in 2016 are forecast to grow to between £50m and £60m, rising to £80m the following year, and Welch, who set up Blackcircles in 2001, said: “That’s quite consistent strong growth – I think the formula we’ve laid down will help us deliver that.”
Welch left school at 16 to become a tyre fitter in Liverpool and launched his first tyre business in his teens before being headhunted by Kwik-Fit and moving to Edinburgh to develop a website for the group. He also spent time in the US, helping car giant Ford with its online strategy following its £1 billion acquisition of the Edinburgh-based business.
Blackcircles generated revenues of about £27.8m in 2013, an increase of 20 per cent on the previous year. Thanks to the popularity of its “click and fit” formula, which includes the sale of tyres and their fitting, growth in the first three months of this year accelerated to 34 per cent.
The deal with Michelin took about nine months to thrash out and came after the Borders business was approached by almost 40 private equity firms from around the world.
As well as triggering a multi-million pound windfall for Welch, the sale delivered a bumper payout for shareholder and former Tesco boss Sir Terry Leahy.
Some of the sale proceeds have been used to set up the Welch Trust, a charitable foundation aimed at children’s causes including adoption and critical and terminal illness.
Welch, who was adopted at the age of six months in Liverpool, said: “One of the first projects we’re looking at is an online community platform for adopting families. One of the issues is there’s a serious gap in the counselling side of adoption and fostering because the funding model is archaic.
“Sharing experiences can be a real remedy, so bringing people into the platform and online communities will be very powerful. It will also take the burden off local agencies.”
He added: “It’s something I’m passionate about and know a lot about – in fact I probably know more about this than tyres.”
Blackcircles last year opened its first tyre fitting centre in Scotland under a tie-up with Tesco, where Leahy was at the helm for 14 years until 2011.
The Tesco PitStop, at the retailer’s Silverburn site in Glasgow, was the fourth in the UK and joined other sites in Cambridge, Milton Keynes and Handforth in Cheshire. Further centres will be rolled out, though Welch said they will not all be at Tesco locations.
He said: “There’s no pressure on the business to roll at any speed; it’s all about doing it right as opposed to just getting it out there.”
Despite Blackcircles now being owned by the French tyre maker, Welch insisted there was no pressure for the firm, which works with a network of more than 1,300 garages across the UK, to push Michelin’s products ahead of its rivals.
He said: “They have more than 300 sites with their ATS Euromaster garage network, so that’s been introduced into the Blackcircles network and it’s been really helpful because it gives us city centre and high street locations.”