Specialist franchise dealer HR Owen is looking to establish a network of used supercar dealerships in key city markets.
The publicly-listed group, which operates predominantly in the capital, has been put under a strategic review by its new chairman Jon Walden. He wants to ensure more robust cashflow and profits for its investors.
The business has been hit badly by a drop in sales and aftersales while the high costs of operating flagship showrooms in London remain. Last year it swung from a £300,000 profit to a £1.3m loss before tax and exceptional items while turnover dropped almost £20m to £125.4m.
Chief executive Nick Lancaster told AM that in order for HR Owen to remain a public company it now needs to grow. It has cash to invest, thanks to a £7.5m property windfall, and is examining opportunities for investment.
“We’re not closing our minds to any opportunity that would be good for shareholders in providing a sustainable return,” he said.
One avenue already identified is used luxury and sports cars. Last year Lancaster opened HR Owen Specialist, a site in Kensington, London, displaying pre-owned models from its partner franchises plus other marques it doesn’t represent, such as Aston Martin and Porsche.
It is already successful in catering for buyers who want to be able to compare multiple marques in the same visit, much as they might when shopping for a luxury watch.
“This is the first of what we hope will be several centres specialising in used cars. I believe London is big enough to take two to three of these sites, but our general view will be to consider developing a much bigger chain of these further afield in major cities,” said Lancaster.
HR Owen will not seek new sales franchises with premium brands – only last year it completed a downsizing strategy which saw it shed its Volvo, BMW, Land Rover and Jaguar businesses. However, Lancaster believes there could be opportunities in major cities for standalone aftersales sites serving growing premium franchises such as Audi, BMW and Mercedes-Benz.
He is keen to expand with his existing partners. Later this year HR Owen will open its second Rolls-Royce showroom in London.
“The business is doing very well now. We’re in a strong position in terms of balance sheet, management, staff and processes and we’re looking to take on more businesses,” Lancaster said.