The deal, which was signed on December 31, takes Cambria to 19 sites and will boost turnover to £275m-300m this year, taking it into the AM100 top 30. It means Cambria has beaten by a year its target of becoming a top 50 retail group by the end of 2008.
Speaking to AM, Cambria chief executive Mark Lavery said: “This takes us to a different level. Summit has great brands, locations and a customer service focused culture which fits well with Cambria.”
The new business will not be immediately performance enhancing, although Lavery expects that to change within three months.
“It is not performing to its potential,” he says. “Sumitomo’s position was to expand the business and it was resourced appropriately. But it has too much central control and is too head office-focused.
“We believe in autonomy, accountability and responsibility and we have no head office. So we will turn the Summit business into autonomous, standalone business units.”
Cambria was launched in summer 2006 with financial backing from Promethean Investments, which holds a 50% stake. The five-year plan is to turn the group into a £500m turnover business with 35-40 dealerships based in the Midlands, north west and south west.
The Summit purchase moves Cambria slightly away from its original target markets. Its dealerships – Jaguar, Aston, Ford and Volvo – are based largely around the south east. But the deal was too tempting to ignore.
Sumitomo took the decision to sell the business following a global review of its 900 subsidiaries. Summit was suffering from cashflow problems caused by issues with its pension scheme. According to former Summit Group chief executive Bin Haga, it would have cost “millions” to put right.
“It was a difficult judgment, but Sumitomo decided that if they could find a good partner, then they would sell the business. If they couldn’t, then they would keep it,” Haga added. Cambria had the right credentials.
Despite expanding Cambria almost five-fold in one swoop, Lavery has no plans to sit back. “We are still acquisitive,” he said. “And we are getting approached from dealers looking to sell. Without doubt, we will make more purchases this year.”
Growth will come with existing and new franchises. Lavery has already obtained approval from a couple of manufacturers to take on their franchises and is confident this will happen in the first half of the year.
However, any purchases this year will not be on the scale of Summit. “We had to do something to establish ourselves. Now it is selective acquisitions in the ones, twos and threes,” added Lavery.
He has no plans to rebrand the Summit dealerships (see panel), which have good profile in their local areas. “This isn’t about developing a national brand; it’s about having local brands headed by local people that have passion for the business.”
Lavery is undertaking a “root and branch review” of the business this month but hopes to retain most staff and management. Haga will remain with the Sumitomo business and is likely to return to Japan.
Summit trade names and locations
Aston Martin – Brentwood, Exeter, Welwyn
Jaguar – Brentwood, Exeter, Welwyn
Jaguar – Croydon
Volvo - Croydon, Gatwick, Horsham
Ford – Canterbury, Ashford, Thanet
Ford – Croydon, Wimbledon