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Extended: ‘Unrealistic rents’ hit CarShock plan

More than six months after saying that it would franchise its brand as part of a nationwide expansion, cut-price retailer CarShock has been unable to land a single agreement.

Graham Cook, CarShock’s development director, blames “unrealistic rents” demanded by freeholders. “They were the reason two franchising developments failed to happen,” he says.

Cook believes that people with small franchised dealership businesses – regarded as potential CarShock franchise holders – are also deterred by the cost of stocking. Each site is expected to offer around 75 cars.

“I am confident franchising will happen,” says Cook.

CarShock, which sells delivery-mileage new cars and some of its trade-ins, has grown from one to six sites since 2002. Cook says the turnover is around £20m and target areas for expansion include Luton, Cambridge and Scotland.

Based on its own statements, CarShock is falling progressively further behind in its development plan. In late 2003 Mike Porritt, managing director and founder, told AM the company would have eight sites turning over £40m by the end of 2004. He wanted to double the size of that network and its turnover by the end of 2006.

Last September, Porritt told AM he wanted a 20-strong network by the end of 2007. “I see no reason why we shouldn’t have representation in every significant UK conurbation within five years,” he said. “Franchising is the quickest way to establish a national network.”

Last autumn, former Fiat UK used car and logistics director Rob Hatfield joined CarShock as franchising manager. He has since left. Cook says: “It was always agreed that Rob would be with us for a short time.”

#AM_ART_SPLIT# CarShock has preferred to expand put new low-cost structures on reclaimed industrial land but was forced to acquire the lease on a former dealership for its latest outlet.

The Sunderland site, opened two months ago, is a former MG Rover dealership operated by Mill Garages, a division of European Motor Holdings. The premises were built in the early Nineties by EMH as a BMW outlet, but the franchise was later moved.

CarShock started at Newcastle-upon-Tyne and prior to Sunderland added sites at Gateshead, Leeds, Darlington and Middlesbrough.

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