Family venture finds huge success

When Link Motor Supply told Charles Francis O'Reilly that his years of managing the store were coming to an unexpected end, the 72-year-old O'Reilly spurned the notion of retiring to a rocking chair on the front porch.

Instead, he and his son Charles H. "Chub" O'Reilly, who was then a salesman for Link, turned around and opened their own auto parts store. O'Reilly Automotive Inc. opened at 403 Sherman in Springfield.

The year was 1957, and the O'Reilly family have never had cause to regret the move.

700 stores +

O'Reilly Automotive now operates more than 700 stores in nine states, manages 11,000 employees, and has a net sales increase for the year 2000 of 18 percent, to $890.4 million.

Its first full year in business, aided by a dozen employees, the company grossed $700,000. By 1961, volume rose to $1.3 million and the retail auto parts storefront developed a wholesale companion, Ozark Automotive Distributors.

The annual sales volume grew to $7 million by 1975, when O'Reilly Automotive opened its modern 52,000-square-foot warehouse at 233 S. Patterson. At that time, the company owned and operated nine stores in southwest Missouri.

Going public

In 1993 the company went public. "A great move," said Vice Chairman Charlie O'Reilly. "Back when I started in '63, we still had just the one location. Then we put in a second location, and a third, and a fourth. We put in 20 stores in 25 years, and by the end of that time period, my two brothers and my sister had all come to work for the company.

"I always tell the story that one day we just sorta woke up to the fact that we were in a great business with lots of opportunity. We realized we could grow and it got completely out of control after the '80s."

Going public gave the company a better source of capital, O'Reilly said. "(It) let us plug in stock options, profit sharing, a pension plan. It gave added motivation for growth, gave us a company culture and company spirit. The growth of the stock helped me personally, and helped everyone involved in O'Reilly Automotive."

Diana Hicks, internal communications manager, cited O'Reilly's January 1998 merger with Hi/Lo Auto Supply in the southwestern United States as a major turning point in the company's fortunes. "They had 190 retail stores," she said, "and a big distribution center in Houston, Texas. That merger made us one of the top 10 auto parts chains in the country."

O'Reilly now has distribution centers in Springfield, Kansas City, Oklahoma City, Houston, Des Moines, Dallas and Little Rock, which Hicks said means overnight parts shipment and delivery to all of the company's retail stores.

David O'Reilly, Charlie's younger brother, chief executive officer, and co-chairman of the board, explained the company's "one call does it all" policy. "We've been really focusing on that lately," he said, "because we want to make sure we do a good job being responsive to our field personnel in the stores, who desperately need administrative staff support. They call in, and it's our goal to be sure they get quick and accurate information without having to be transferred around. It helps up and down the line, clear down to the retail customer."

Motivating its employees "Team O'Reilly" is a corporate theme. "Our success depends on the hard work of all the team members," Charlie O'Reilly said.

"Team O'Reilly"

Charlie O'Reilly, who came back to the family business after teaching history in St. Louis, said that at first, the concept of Team O'Reilly referred only to him and his siblings, all of whom joined their dad at work in the company within a 10-year period.

David O'Reilly had been working in a management program with Southwestern Bell in Kansas City, but threw his hat in the O'Reilly ring after deciding that "our little business could offer me a lot of opportunities. It was a place where I could make a difference, do something that mattered."

Larry O'Reilly came in right after college, in the late '60s, and sister Rosalie (now Rosalie Wooten), joined her brothers after teaching at Glendale High for a number of years. "She's made great contributions," David O'Reilly said. "She handled our insurance and telecommunications for years, and is now executive vice president."

The family concept grew to include everyone who worked for the company, said Hicks. "We're a close-knit bunch here, and a lot of us have been here for a very long time."

Springfield stores

The company has 10 Springfield retail locations, a warehouse and a corporate office, which together employ 650 people.

The family feeling also extends to the community-at-large. Charlie O'Reilly's wife, Mary Beth, started the Breast Cancer Foundation of the Ozarks several years ago after her own battle with the disease.

All of the O'Reillys are committed to various charitable causes, not only in Springfield but "in any community where we open a store," according to Charlie O'Reilly. They have contributed to Ozarks Fighting Back, Big Brothers/Big Sisters, the Developmental Center of the Ozarks, and many other entities.

"When we have our ribbon-cutting ceremony, we give money to a local charitable organization, to start us out as a good business citizen," Charlie O'Reilly said. "We always want to give back to the community."

Future plans

Asked about the company's future plans, Larry O'Reilly, co-chairman and chief operating officer, cited manager development programs and the additions of new stores in states where the company still has room to grow, such as Iowa and Arkansas.

Hicks said the company's goal is to reach $1 billion in revenue in 2001. To that end, said David O'Reilly, this year's plans "include continued growth with 120 new store installations, with existing progress towards increased same-store sales growth."

David O'Reilly added that overall long-term plans continue to be consistent and call for steady growth with expansion of new stores in the range of 18-20 percent annual growth, primarily in existing and contiguous markets.

According to a company report, O'Reilly net income for 2000 increased 13 percent, to $51.7 million, with results reflected in the opening of new stores and increased same-store sales, factors partially offset by higher salaries and benefits costs.

David O'Reilly does not worry about the jumpy stock market affecting the future of the company.

"I suppose that if our stocks really fell, it could impact us with future capital needs if we were going back to the equity market for capital," he said. But we don't anticipate that anytime soon, as our balance sheet is very strong. And our stock has held up very well in the last few months. We tend to go against the grain of the economy in that when the economy goes down, people hold on to their cars and take better care of them. When the economy is good, then people are buying more accessories and taking care of their cars in a different way. It makes for a somewhat recession-resistant business."

Larry, David and Rosalie continue to plan the future of O'Reilly Automotive, along with Vice President/CFO/Treasurer James Batten and Co-Presidents Ted Wise and Greg Henslee.

Charlie O'Reilly is semi-retired now, working only two days a week and phasing out his role in management. He said he is looking forward to traveling, relaxing and enjoying life a little more. "After all, we've worked hard," he said with apparent satisfaction. "We deserve it."