Sonic Automotive ramped up its online retail efforts with three executive moves announced Friday.
The retailer has hired its first-ever chief digital retail officer, bringing in former Hertz executive Steve Wittman, as well as a vice president of eCommerce, hiring former Belk exec Stephen Conrad.
Sonic also promoted director of brand management Marti Eulberg to serve as chief creative officer.
In that role, Eulberg will report to Sonic president Jeff Dyke (who is also president of the company’s EchoPark Automotive used-car stores). She will work alongside Wittman, Conrad and chief marketing officer Rachel Richards “to ensure the digital retailing eCommerce platform aligns with the Company’s guest experience and brand management standards,” Sonic said in a news release.
Eulberg, one of Auto Remarketing’s 2017 Women in Remarketing honorees, has been with the company since 2012 and her experience has included heading up the brand management of EchoPark and contributing to facility development projects on the franchised store side, helping to ensure Sonic complies with OEM brand management protocols.
“Working with the team at Sonic over the last eight years to bring innovative change to the industry has been a truly rewarding experience. I am looking forward to all the challenges and opportunities with this new position,” Eulberg said in a news release.
“As we embark on the next phase of growth, it’s an especially exciting time to lead the creative aspects of our business and continue pushing the boundaries of what customers can expect from Sonic Automotive and EchoPark Automotive,” she said.
Meantime, Wittman was most recently Hertz’s vice president of global eCommerce, and Conrad was Belk’s director of eCommerce digital experience and site operations.
“It’s our pleasure to welcome Steve and Stephen to our team,” said Dyke, the Sonic and EchoPark president, in the release. “We are creating a best-in-class online guest experience, just as we have done in-person at our dealerships.
“Our goal is to ensure car buyers can purchase a new or pre-owned vehicle in the way that suits them best — online, in-person or a hybrid of both. Steve and Stephen are both seasoned eCommerce executives who will contribute to our long-term success,” Dyke added. “ We are also especially pleased to welcome Marti to our leadership team as chief creative officer after eight years of service to the organization. The impact of her contributions to Sonic Automotive and EchoPark Automotive have been felt across the entire company and especially by our customers.”
In a transaction involving Kerrigan Advisors, two groups purchased three franchised dealerships in Illinois from Continental Motors of Naperville.
According to a news release, Continental Audi and Continental Mazda were sold to Chicago-based Bill Napleton Auto Group, while Continental Acura was sold to Desmond Roberts, owner of Advantage Chevrolet of Hodgkins, Advantage Chevrolet of Bolingbrook and Advantage Toyota of River Oaks, all located in Illinois.
Founded in 1961, Continental Motors Group is one of the oldest and longest-running family owned dealership groups in the Chicago area. Brothers John and Herman Weinberger opened their import repair shop in Lyons, Ill., in 1961 and quickly became new-car dealers with their first franchise, Triumph, in 1962.
From that point, the family business grew through the brother’s legacy of customer support and service, ultimately leading to Joel Weinberger’s ownership of Continental Motors’ Naperville platform.
“As a family, we are proud and thankful to be a part of the Naperville community, Chicago’s largest car market,” Joel Weinberger said in a news release distributed by Kerrigan Advisors. “I am incredibly grateful for the years of hard work from my Continental team, and for the support of my customers and the community over the last three decades.”
In addition to serving its thousands of customers, Continental has also championed local charities during the last 33 years, including the Drive for 135, an annual fundraising event to end homelessness and its annual “Driven to Care” vehicle donation program that has put 56 vehicles in the hands of needy families over the past seven years.
The Naperville dealership group is part of the larger Continental Motors Group. With these transactions, the Weinberger family will continue to own and operate Continental Honda in Countryside (owned by brother Jay Weinberger), and Continental Toyota in Countryside (owned by cousin Cheryl Nelson).
According to the news release, Joel Weinberger will retain and manage his Ferrari dealership in Hinsdale, Ill.
Among Continental Motors of Naperville’s many accolades are being named Naperville’s Best Auto Dealership every year since 2009 by Naperville Magazine; Continental Audi’s recognition, three times as an Automotive News Best Dealership to Work For and 13 times as an Audi Magna Society award winner as well as an Audi Magna Society Elite winner in 2018. Continental Acura also is a 20-time recipient of the Precision Team Dealership of Distinction Award (more than any other Acura dealership in Illinois) and Acura’s Gold Environmental Leadership Award.
“The traditions that my father John and my uncle Herman started have carried over through the years in my business,” Joel Weinberger said. “Things like exceptional customer service and a commitment to a strong work ethic. That has passed the test of time for us, and that’s how Kerrigan Advisors approached this transaction.
“We selected them as our exclusive sell-side advisor to represent us for that reason and are very grateful for the expertise and assistance they provided throughout the sale process. Their preparation, accounting review, due diligence management and ultimately closing assistance were invaluable to our transaction,” Weinberger went on to say.
These transactions mark the 93rd Kerrigan-led dealership sale since 2015.
“The auto retail industry is tracking toward record profits in 2020, despite the challenges of COVID-19. Not surprisingly, buyers in today’s active buy/sell market are seeking prime assets such as Continental’s Naperville dealerships,” said Erin Kerrigan, founder and managing director of Kerrigan Advisors. “Our firm was honored to represent Joel Weinberger in the sale of his dealerships, which are among the most valuable in Chicago. Naperville is an incredible car market, and Joel’s dealerships are known for their impeccable reputation in the community and committed employees.
“With a 60-year family legacy and a complex, multi-dealership transaction, it was vital that Kerrigan Advisors dedicate the time and energy necessary to prepare Joel’s group for sale, so we could identify the right buyers for his valuable dealerships and ensure a smooth closing,” continued Kerrigan, who was among this year’s Women in Retail honorees highlighted in Auto Remarketing. “Continental has a lasting family legacy that will continue to grow and evolve with the new owners, both of whom are family run with multiple generations involved.”
David Blum, Scott Wasserman and Santiago Assalini of Akerman LLP served as legal counsel to the seller. Christine Smith of Crowe served as the seller’s accountant.
This week, Open Road Capital and Bain Capital Credit announced the formation of a strategic partnership to make long-term equity investments in automobile, heavy truck, recreational vehicle and heavy equipment dealerships and other transportation companies, especially operations that have been in family hands for decades.
And these firms already made their first move by making an investment in a Mississippi dealership group.
The first investment is in Herrin-Gear Autoplex, a family owned and operated dealership group. Founded in 1968 by Carl Herrin and George Gear, the Herrin-Gear portfolio includes BMW, Chevrolet, Infiniti and Lexus dealerships in Jackson, Miss.
The business has remained family operated under the leadership of Jack Herrin since 1998. According to a news release, management will continue operations consistent with those that propelled the dealerships to among the top performers in the region.
As part of the transaction, the firm said general manager Reed Howell has been elevated to president of Herrin-Gear and has acquired an equity stake in the business.
“This transaction reflects a major milestone for our family and for our business. Partnering with Open Road Capital will allow Herrin-Gear to pursue new opportunities while maintaining the legacy and culture built over the past 50 years,” said Herrin, who will maintain an equity stake and continue to serve on the company’s board of directors.
“Open Road Capital’s deep industry knowledge and expertise, along with their familiarity with our business, makes them the ideal strategic partner for our team as they seek to take Herrin-Gear to the next level,” Herrin continued.
As Open Road Capital and Bain Capital Credit forge ahead, InterPrivate, a family office backed investment firm, also is expected to offer additional long-term capital to the platform for certain future opportunities.
The firms said the platform launches with the objective of building a substantial portfolio of distinct investments in partnership with top-performing operators throughout the country.
They continued by noting the primary mission of the platform is to partner with high-performing dealer groups nationwide by providing equity capital in support of family member and business partner ownership transitions, recapitalizations and estate planning, growth and acquisition opportunities, or a combination.
Open Road Capital said it also will purchase dealerships outright from dealers seeking a complete exit, including dealers who would like to see their legacy continue through sales involving their current general managers or group of managers.
The firms explained each investment will be made in partnership with a dealer/operator, and the stores of each dealer/operator will reside within a separate partnership and operate independently from other platform investments. The firms said this approach preserves the entrepreneurial spirit that drives great operators, augmented by capital and other support that accelerate growth and scale in today’s competitive environment.
“We are excited to partner with the extended Herrin family, Reed Howell, and the quality management team assembled at Herrin-Gear,” said Eric Chelline, partner at Open Road Capital. “This proven team has generated strong results through multiple economic cycles, and we look forward to providing the resources and latitude to support their continued success.
Open Road Capital Partner Tim Batchelor expressed appreciation for the firm’s continuing and expanding relationship with Herrin-Gear’s manufacturer/distributor partners, noting, “Along with dealers, manufacturers and distributors are Open Road Capital’s most important partners, and we look forward to helping them achieve their network objectives by providing financial support to top performing dealership operators who otherwise might not have the resources to achieve their goals.”
Bain Capital Credit managing director Olof Bergqvist shared his perspective on the partnership.
“Over the last few years, we have built a close relationship with Open Road Capital, and we share a strategic vision of the constructive role our partnership can play in unlocking opportunities in this evolving industry,” Bergqvist said.
Fellow Bain Capital Credit managing director Matt Evans added, “We look forward to a productive partnership with Open Road Capital as we seek to provide creative solutions to address the various challenges and opportunities facing auto dealership owners throughout the country.”
Pinnacle Mergers & Acquisitions president Mike Sims served as the financial advisor and Brunini Law Firm served as legal counsel to Herrin-Gear.
Holland & Knight LLP and Kirkland & Ellis LLP served as legal counsel to Open Road and Bain Capital.
One of the largest non-public dealer groups in California resolved some legal matters this week.
Trophy Automotive Dealer Group announced that it has reached a settlement with Byron Moldo, the court appointed receiver for the Sage Group of dealerships.
According to a news release, various TADG subsidiaries filed complaints in June and October against the receiver and various Sage entities for specific performance and breach of contract. The settlement resolves these complaints.
The announcement went on to mention the settlement also fully resolves the action filed by the receiver against TADG, certain of its subsidiaries, TADG president Nasser Watar and certain former Sage employees, alleging various claims including concealment and breach of fiduciary duty.
Furthermore, the settlement includes the complete dismissal of the action against Watar, TADG, its named subsidiaries and the named former Sage employees.
However, the settlement did not include any admission of liability on the part of Watar, TADG, its subsidiaries or any of the named former Sage employees.
“I am happy that the parties have agreed to a full resolution of their claims in this settlement, including the complete dismissal of claims against myself and Trophy Automotive Dealer Group,” Water said in the news release.
Lithia Motors continued its busy second half of expansion Tuesday, announcing it has acquired Latham Ford in the Albany, N.Y., area.
This move marks the 12th store to be added to Lithia’s network in the last two months, along with several others announced earlier in the summer.
Lithia announced the purchase of Jim Cogill CJDR in Knoxville, Tenn., in late September. Three weeks earlier, Lithia purchased the remaining six stores in the John Eagle Dealerships family, having announced its purchase of four John Eagle stores on Aug. 4.
In late July, Lithia announced it had purchased BMW of San Francisco, which followed the addition of DCH Subaru of Thousand Oaks, Calif., in mid-July.
Earlier in the month, Lithia announced it acquired Smolich Chrysler Jeep Dodge Ram and Nissan dealerships in Bend, Ore.
As for the latest deal, Lithia anticipates Latham Ford will bring in annualized revenues of $55 million to the group.
All of the expansions to Lithia’s network in 2020 are expected to bring more than $1.75 billion in annualized revenues.
“We are pleased to add Latham Ford to the Lithia Family, further strengthening our ability to serve our communities in the Northeastern United States,” Lithia president and chief executive officer Bryan DeBoer said in a news release.
He added: “The growth of our physical network expands our ability to provide consumers with convenient and affordable new vehicle, used vehicle, service and parts solutions.
“Together, with our Driveway digital home channel, we are providing flexible and complete vehicle ownership solutions wherever, whenever and however consumers desire.”
Lithia funded the acquisition via free cash flow and existing on-balance sheet capacity.
Sonic Automotive is beefing up its EchoPark Automotive retail hub location in Charlotte, N.C.
The retailer bought roughly four acres of land adjacent to that EchoPark retail hub, which will allow for about 400 additional vehicles to be parked there.
With this addition, there would be room for approximately 1,000 vehicles at the Charlotte EchoPark retail hub, Sonic said.
“Our continued investment in our Charlotte EchoPark location reflects the increasing customer demand we’re seeing in the metro area and neighboring markets,” Sonic and EchoPark chief executive officer David Smith said in a news release.
“Our Charlotte retail hub will continue to play a key role as we expand our EchoPark footprint throughout the region with the opening of additional EchoPark delivery and buy centers in the near future, which will enable consumers in new markets to experience the price, quality and convenience the EchoPark brand has to offer,” Smith said.
There are typically more than 500 later-model used vehicles sold out of that Charlotte EchoPark retail hub each month, said Sonic and EchoPark president Jeff Dyke. That kind of demand necessitates an expansion in the Queen City hub.
“With this type of customer demand and the opening of our first delivery and buy center in Greenville, South Carolina, we knew we had to expand our capacity to support the growing EchoPark brand in the Carolinas,” Dyke said in a news release.
“Our Charlotte EchoPark location will supply inventory for sale through our delivery and buy centers in nearby states, which offer our guests a modern e-commerce buying experience at EchoPark.com as part of our growing 140-point nationwide distribution network,” he said.
The Charlotte EchoPark retail hub debuted in October 2018. It was one of the first locations for EchoPark, which began in 2014.
EchoPark overall retailed 13,207 used vehicles in the second quarter, with annual sales likely to top 61,000 this year, Sonic said. The Charlotte store moved 1,500 units in Q2.
After a couple of summertime rough spots, September is shaping up to be a strong month across the board for Sonic Automotive’s used-car operations, both within its franchised dealerships and its EchoPark Automotive standalone pre-owned stores.
In an updated outlook released Tuesday, Sonic said same-store used sales for its franchised dealers so far in September are up 6% year-over-year. This follows a 5% decline in July and a 9% drop in August.
Within its EchoPark stores, same-store used-car sales were up 13% in the first half of September. In July, they climbed 3%, which was followed by 10% decline in August.
Meantime, looking at all EchoPark locations, used sales are up 36% year-over-year so far this month. That follows a 19% hike in July and a 4% gain in August.
Offering some context specific to EchoPark, Jeff Dyke, who is president of both Sonic and EchoPark, said in a news release: “Our first EchoPark delivery and buy center in Greenville, South Carolina opened in late July, exceeding early revenue and profit expectations for our e-commerce model.
“We are excited to leverage the efficiency of the EchoPark model and bring our low pricing and best-in-class guest experience to new markets across the country as we open additional EchoPark points in Arizona, Georgia, South Carolina, Tennessee and Texas in the next few months,” Dyke said.
In addition to sharing overall commentary on the group’s performance beyond used cars, Sonic and EchoPark chief executive officer David Smith discussed some of the recent developments at EchoPark, as well.
“We are very pleased with our operating performance in the third quarter to date, continuing our recovery from the challenges our industry faced earlier this year,” Smith said. “Consumer demand for new and used vehicles and parts and service repair work has continued to improve steadily in recent weeks, particularly when factoring in the timing of this year’s Labor Day weekend sales compared to the prior year.
“Additionally, our commitment to increasing operating efficiency at both our franchised and EchoPark stores continues to drive enhanced profitability,” he said. “With the recent opening of our newest EchoPark point in Houston, we continue to execute on our strategy of building an omni-channel nationwide distribution network consisting of our EchoPark retail hubs, delivery and buy centers and online at EchoPark.com to offer our guests a first-class car-buying experience.”
Looking forward, Sonic shared slides on expectations for the rest of the year, with the disclaimer that “Due To Uncertainty Related To The COVID-19 Pandemic And The Resulting Economic Impact, Actual Results May Differ Materially From Management’s Forecast.”
Starting with franchised dealer used-vehicle sales, a chart shows those slowing from current levels through November, before rising in December. EchoPark used sales appear to be headed on a rise from current levels through December.
In what the company’s chief executive called a “critical part” of a strategy to expand its standalone used-car store program, Sonic Automotive announced Tuesday that it has opened a second EchoPark Automotive store in Houston.
This is Sonic’s 11th EchoPark retail hub, its fifth in Texas and is part of the retailer’s plan to grow its used-car stores.
Starting in 2021, Sonic plans to add 25 EchoPark stores annually for the next five years.
“The opening of this new Houston location is a critical part of our overall EchoPark expansion strategy,” Sonic and EchoPark CEO David Smith said in a news release.
“This store will not only serve the local community, but it will also enhance our growing nationwide distribution network,” Smith said. “This store opening reflects EchoPark’s continued rapid growth and is another step toward achieving our goal of $14 billion in annual EchoPark revenues by 2025.”
Sonic’s existing EchoPark store in Houston is located at 8477 North Freeway. The second store is located at 10050 Southwest Freeway on the southwest side of the city.
Sonic and EchoPark president Jeff Dyke, who is from Houston, said in the release: “As we strategically expand our EchoPark footprint, opening a second location in my hometown of Houston is particularly exciting.
“By repurposing an existing Sonic facility, we already owned on Southwest Freeway and leveraging our existing EchoPark store in north Houston, we have quickly increased our Houston brand presence and market share with minimal capital expenditures,” Dyke said.
“Further, we are very proud to add 41 full-time positions with this expansion, bringing EchoPark’s total count in the city to over 120 jobs. We look forward to continuing to be a part of the Houston community as we grow the EchoPark brand presence,” he said.
Going forward, Sonic’s next steps in expanding EchoPark include plans for new locations in Nashville, Tenn.; Plano, Texas; Phoenix; Columbia, S.C.; and Austin, Texas.
“As customer demand continues to increase, each new market we enter will allow EchoPark to grow its overall market share by offering guests best-in-class price, quality, and convenience in their pre-owned vehicle purchase, which are the cornerstones of the EchoPark brand,” Smith said.
AutoNation is offering a free service for teachers stretching into the opening month of school being back in session.
This week, AutoNation announced that it will offer teachers free vehicle sanitization at its dealerships from coast to coast Tuesday through Sept. 29.
The group said in a news release that teachers are encouraged to stop by any AutoNation store on Tuesdays for a free Clorox T360 sanitization treatment for their vehicle.
AutoNation said the process is meant to be easy as teachers can show their current teaching badge, or ID, “sit back and relax.” In less than 30 minutes, the company said they will drive off in their vehicles that have been sanitized with an EPA-approved disinfectant registered for use against COVID-19.
“AutoNation is committed to keeping America driving safe. So, while teachers are educating our children, AutoNation will do its parts to keep them driving safe,” AutoNation executive vice president and chief customer experience officer Marc Cannon said in a news release.
“We thank all of our teachers for their commitment to learning and education,” Cannon continued.
AutoNation also made this disclaimer:
*All efficacy claims & statements are relevant when the disinfectant product is applied correctly. This disinfectant product has been approved & registered by the EPA for use against SARS-CoV-2, the virus that causes Disease 2019 (COVID-19). Disinfectant methods or claims should not be deemed to state or imply that the products can eliminate or prevent transmission of any virus, illness, or disease. For product manufacturer or EPA registration information, please see an AutoNation Service Associate for details. Offer expires September 29, 2020.
To use store vernacular, Asbury Automotive Group’s acquisition of Park Place Dealerships finally rolled over the curb this week.
Asbury announced late Monday afternoon that it completed its deal to secure Park Place, adding approximately $1.7 billion in annual revenues.
Asbury president and chief executive officer David Hult elaborated about how the dealer group overcame pandemic-triggered challenges to complete the acquisition first announced back in December, nearly scrapped in March before being revitalized in July.
“Park Place remains one of the best operators of luxury stores in the industry. Their portfolio of stores comes with a strong base of loyal clients and long-term team members throughout the high growth Dallas/Fort Worth market,” Hult said.
“We are thankful to both the Asbury and Park Place employees who have worked tirelessly over the last few weeks to complete this transaction,” he continued. “The talent in both organizations and the resilience of the dealer model have put us in a position to become a stronger and more diversified company. I am pleased to welcome all our new teammates at Park Place.”
Before the development, Park Place owned and operated what Asbury described as a portfolio of high volume, award-winning luxury dealerships with premier real estate. Four stores are ranked among the Top 10 stores in volume in the country amongst their franchise: Mercedes-Benz, Lexus, Porsche and the Jaguar/Land Rover.
In addition, the other Lexus store and the Volvo store are ranked in the Top 20 stores in volume nationally, according to Asbury.
"The luxury segment has historically delivered strong and stable margins that are significantly above those achieved by mid-line import and domestic brands,” Asbury said in a news release. “Luxury stores also tend to be more resilient in economic downturns, and have higher and more stable margins, fewer dealers nationwide and a higher portion of gross profit from parts and service.”
The dealer group also highlighted the transaction will increase Asbury’s geographic mix to 28% of revenue derived from the Texas market and will further diversify the company’s overall portfolio from 36% to approximately 49% of revenue derived from luxury brands.
Presidio was the exclusive advisor to Park Place on the sale.
