When the recession hit in 2008, officials at Les Schwab Tires pumped the brakes on their expansion plans.
They didn’t completely stop growing, but Dale Thompson, the company’s chief marketing officer, said there was a short stretch when the Oregon-based tire shop wasn’t as aggressive as they were pre-recession.
That pause has ended and Thompson said the company has major expansion plans in Colorado and around the West.
“As we were coming out of the recession, we felt it was a good time to look at new markets,” he said.
Last month, the company had grand openings at three new tire shops around the metro area, marking eight stores around the metro area and seven since March 2013.
It’s a common scenario among businesses following the recession: now that the economy seems to have turned a corner, businesses who either held back on expansion during the lean years or grew more slowly are jumping into major expansion plans.
In the case of Les Schwab, Thompson said they hope to start adding between 10 to 15 new locations each year for the foreseeable future. Already, the company that started with just one shop in Pineville, Ore., in 1952 has more than 440 shops around the West, including one at Tower Road and Interstate 70 in Aurora and one at East Arapahoe Road and Parker Road in Centennial.
Mac Clouse, a professor of finance at University of Denver’s Daniels College of Business, said that when recessions happen, it’s common for even profitable businesses to pull back on expansion plans.
“It just doesn’t make sense to expand your capacity until you see the need for it,” he said.
Even if the economy is improving, Clouse said companies don’t want to be the first ones to expand, or even the second ones. They generally want to see that the economy has turned a corner and their expansion can prove successful, he said.
The problem there, Clouse said, is that if businesses that could grow opt not to, the recession can drag longer than it otherwise would because the capital they would use to expand stays on the sideline.
“So we just didn’t see the job creation that comes with those kind of things,” he said.
Last week, the U.S. economy seemed to turn a corner away from the recession with an important milestone: it finally regained all the private-sector jobs it lost during the last recession.
Yet it took a painfully slow six years, and unemployment remains stubbornly high at 6.7 percent.
The comeback figures were contained in a government report last week that showed a solid if unspectacular month of job growth in March.
Businesses and nonprofits shed 8.8 million jobs during the 2007-09 recession; they have since hired 8.9 million. But because the population has grown since the big downturn, the economy is still millions of jobs short of where it should be by now.
Also, government jobs are still 535,000 below the level they were at when the recession began in December 2007. That’s why the overall economy still has 422,000 fewer jobs than it did then.
Still, Clouse said that growth breeds more growth and he expects more companies that either didn’t grow at all or grew more-slowly during the recession will jump back in now that the economy is improving.
At Les Schwab, Jeff Lowry, the manager of the company’s Colorado locations, said the recent expansion in Colorado has proven successful.
“People in the community have been receptive to the way we do business,” he said.
Thompson said the company will continue to grow, often the way it has in Colorado with several locations in a particular market around the same time.
“You get a bigger splash by having a number of locations at the same time,” he said.
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