JD Classics couldn’t be further from the ‘stack ‘em high, sell ‘em cheap’ idiom sometimes associated with the used car industry.
The business hand-picks a small number of high-margin historic vehicles to sell each year and repair work at its specialist workshop can take weeks or months depending on budget and complexity.
However, this focused approach does not limit the scope of the business. JD Classics is one of the biggest used car dealers in the UK, ranking 6th in the ID50.
The business has developed a reputation in the classic car industry over the past 30 years for its dedication and attention to detail around selling, repairing, restoring and racing historic vehicles.
That attention to detail is what led Derek Hood to start the business in the first place. After a career in dentistry, a passing collector made him an offer too good to pass up.
Hood said: “It started with one car on my driveway – a Jaguar MkII in opalescent maroon.
“I detail-cleaned the car, sold it on and doubled my money. I always liked to buy dirty cars and then add value to them. Then I bought a Mini Cooper S, in tweed grey with a white roof, and doubled my money.”
A Lotus Cortina was the first car that he actually advertised. From that moment on, Hood knew he could make a business selling cars.
The number of cars sitting on his driveway quickly earned complaints from the neighbours, so he set up at a location in Rettendon, Essex.
Within six years, one unit became 10 and Hood recruited a team of eight, with a mechanic and a bodyshop team, after acquiring a local business.
The business grew so quickly that when a two-acre site in nearby Maldon became available 17 years ago, he took the plunge and bought it.
Hood said: “I overstretched myself massively at that point, I was holding on to the business by my fingertips.”
JD Classics has grown to a team of 72 and the Maldon site has numerous workshops, showrooms and storage facilities all owned and funded by the business.
“It always started with the sales side, but there has been a progression all the way through the last 25 years,” said Hood.
“We started our own historic race team 20 years ago from my own interest. I could see how you could be in business, but it was important that I could enjoy what I was doing too.”
Mayfair and beyond
JD started off specialising in Jaguars, but Hood knew if he wanted to grow he needed to diversify.
“I could see the business was doing well, but it was starting to plateau. I knew we had the skills here with guys that already had experience with Rolls-Royce, Bentley, Aston Martin and Ferrari.
“It was a natural way to move the business forward,” said Hood.
JD went from turning over £25m in 2009, when it was still focused on Jaguar, to turning over £100m within three years of expanding into other marques.
Hood expects turnover of £160m within two years.
Investing in a Mayfair showroom has helped to generate further growth, granting JD access to high-net worth customers who do not want to travel from the capital.
It is a showroom-only location, with space for nine cars, but TV screens show the workshops in Maldon and what the business can do on the racetrack and at events.
Hood said: “I had been looking for space for about four years in London. We were offered the unit in Mayfair, so I went to get breakfast in the area to get a feel for the place and decided there and then.
“Within six months, it added 35% to our bottom line.”
In September 2016, Charme Capital Partners acquired a majority stake in JD Classics and the private equity firm said at the time that it had “identified a number of compelling opportunities to accelerate the company’s international growth in the large, liquid market for classic cars across the US, Europe, Asia and the Middle East”.
JD Classics will open a new business in California this summer and Hood expects it to open an outlet in the Middle East next year.
“California has been in the works for a while now and it’s a natural progression for us,” he said.
“We have been going to Pebble Beach for the last seven years and I noticed straight away there are very few people in the US that offer what we can under one roof. The model we have created works and we will replicate it in California and then the Middle East.”
‘I like my freedom’
Hood has been approached several times by different brands to take on a franchise, but he has never been tempted.
“I like my freedom. We have to think about the margins involved with modern cars and the sort of background hassle that comes along with that. We can make much better margins on our classic cars than modern supercars.”
If JD Classics is selling a £3m classic, Hood said the business can make a margin of between 5% and 15%.
Taking away a fair margin from a deal puts into perspective the kind of exclusivity and high-end product the business works with. It sold 170 cars last year.
Hood said: “The money we get back on a car is always re-invested into the business. Having that amount of money tied up over the years has been tough, but it’s now paid off with the growth we are seeing.”
JD has a sales team at Maldon and Mayfair and they split leads up between themselves through a central database so everyone can see what everyone else is working on.
Stock is sourced from contacts built up over the years globally or from previous customers looking to offer vehicles for JD Classics to buy back. The business has a reputation for writing a cheque for models that fit the bill.
JD gets offered about 25 cars a week, but Hood said it takes only two to four of those.
He said: “People know what standards we work to. If it’s a car we have never seen before, we will look through a series of photographs. Within five to 10 minutes, I’ll know if it’s a car worth buying. It’s all about weeding out the good cars from the bad and that only comes from experience.”
Hood is looking for cars with their original engine and gearbox that have an interesting history.
He said: “It’s looking at a car and knowing how much restoration work it has had, knowing if the colour isn’t factory original, knowing about the changes we will have to make to get the car correct. It’s moved on a lot further than just buying them dirty.”
Hood said the sales team is paid a “good basic wage” and there is a bonus structure in place. JD offers a no-quibble guarantee. If anything is mechanically wrong, no matter where the vehicle is in the world, the business will fly or ship it back at no cost to the customer.
Attention to detail
An engineering team of 60 people make every effort to catch any potential problems. JD is able to handle most work itself, with its own workshop, bodyshop, paint shop, race shop, engine shop, machine shop, as well as trim and valeting teams.
Cushions lined with velcro are stuck to any surface that might catch the edge of a door. All exposed bodywork that isn’t being worked on is covered in protective sheets to reduce any accidental scuffs and scrapes. The temperature and humidity of the fitting-up room and storage facilities are controlled.
While Hood manages the overall direction of JD Classics and uses his experience to pick out the latest trends in classic cars, Chris Ward, operations director, takes care of running the business day-to-day.
Ward is a trained motoring engineer, experienced racing driver and instructor and previously worked as circuit manager for Silverstone before joining JD.
The company has increased its engineering team by 25% over the past five years to cope with growth.
Ward said: “One of the factors that drew me closer to joining JD was the passion the technicians have. Yes, they are lucky they have incredible cars to look after, but classic cars are quite troublesome and tedious to work on.
“You have to have a certain amount of patience. They are all hand-built and nothing matches or lines up correctly, but seeing these projects from start to finish is very rewarding.”
Looking across the cars in the workshop at Maldon demonstrates the types of high-end customers who bring in cars for servicing. However, Ward said the door is open to classics of any type and the same level of care and attention would be given to a Reliant Robin as a short-wheelbase Ferrari.
Ward said: “If a customer comes in for a visit I’ll walk them round, we will look at progress with the car they have in and they will chat directly with the engineering team.”
Each project in the workshop is assigned a lead engineer and they take ultimate responsibility for that project.
Ward said: “It’s important the customer meets the people who have worked on their car so they have a good understanding of the passion that’s being put into it. It gives customers confidence and a boost around what we are doing. It means they always go home with a smile on their face knowing their car is progressing. Technicians get the customer really involved with what they are working on.”
Quality vs speed
Any vehicle leaving JD will be inspected by a minimum of three engineers, once on arrival, by the lead engineer and again before it is signed out.
Ward said the process makes sure any car that leaves JD maintains the reputation the company has developed over the years.
Ward said: “The detail that Derek sets, all of the apertures have to be symmetrical all the way round.
“Every nut and bolt will be put back exactly how it would have been. We’ll tighten nuts with nylon spanners so there are no marks. Judges at events will use a toothbrush on the tyre treads to make sure it’s immaculate.”
Regular servicing jobs are not expected back within a day or two at JD. Some services can take a week, others will take a month.
Ward said: “It’s a lot more bespoke than what you would have at a Porsche or Ferrari dealer because of what is involved. There’s no way you can have set times to do jobs.
“Speed isn’t the key here, it’s quality. You’re better off taking a little bit more time rather than trying to rush something through. “
JD works with customers around a budget which he acknowledges can sometimes be “moveable”. The business works on about 10 restoration projects at a time.
Hood said: “It takes time to get parts, certain ones might need to be ordered in or they might need to be built from scratch, sometimes on site at JD. You’ve got to liaise with the customers on a weekly basis to let them know the progress.”
Six-month jobs can turn into a year depending on what problems are faced. This means managing customer expectations is a key part of Ward’s job, but as he explains, customers want the job done correctly even if that means it may take more time or money.
Digital and younger customers
The digital side of the business is growing more important as it looks to expand into new markets.
A new marketing manager is due to join and she will be in charge of digital strategy. This will include improvements to the website and there will be a focus on editorial content.
JD’s Instagram account already has more than 56,000 followers and pictures are generating thousands of likes.
“You just pull a car off a truck in London and put a picture up on Instagram and it generates interest,” said Hood.
“We want to go for the younger buyer and they’re not the sort to go to WH Smith and take a magazine off the shelf.”
The company already receives questions through Instagram about the stories behind certain cars, which leads to ‘friends’ and may eventually generate sales.
The next focus for Hood is 90s supercars to attract the next generation of buyers, such as the Ferrari F40 or McLaren F1 GTR.
Ward told ID one of the pillars of JD’s success has come from Hood’s ability to keep his finger on the pulse and pick out trends years ahead of time.
Ward said: “You have people that have the ability to buy these cars that were their dreams back in the day.
“That’s how the classic car market started and continues on.”
The importance of classic car events
The racing and events side of JD’s business is very important to its continued success. They act as an advertising board for the capabilities of the business. They also present the perfect networking and sales opportunities with an engaged and relevant audience of potential customers.
Ward said: “It’s not just about selling the cars, it’s about marketing what we do. Promoting the engineering excellence through the racing and the events.”
JD is a gold sponsor at Mille Miglia, partner at Bernina Gran Turismo and sponsors the Le Mans Classic and Goodwood Revival. Hood said the return the business gets from being involved with these events justifies the “millions” spent on sponsorship and attendance each year.
Hood said: “Winning at Pebble Beach Concours was huge for us. It’s the most prestigious classic car event in the world.
“For racing, it’s winning at Goodwood Revival. Being recognised as the best preparer of cars on the MIlle Miglia was also big. We have a 100% record on reliability there, which is unheard of. It’s all down to how thorough we are with the preparation of cars.
“We don’t leave anything to chance.”