Jon Walden, chairman of the supercar franchise dealer group HR Owen, has said the recent high profile resignations of several board members was “no surprise” in an interview with AM in which he outlines his plans for the company.
HR Owen’s boardroom is a very different place after a series of dramatic departures – first chief executive Nicholas Lancaster left after 16 years with the group.
Then resignations followed from non-executive directors Ramon Pajares, Tony Smith and ex-Pink Floyd drummer Nick Mason, who’d served on the board since 1996, 2001 and 1999 respectively.
Walden, who has had the publicly-listed group under a strategic review since joining in January, said the resignations were “no surprise” as a change of management was needed to move forward.
“Reshaping our board is an essential ingredient of moving the company into the next phase of its development,” he told shareholders.
Walden is now leading the hunt for Lancaster’s replacement but stresses he will not be rushed.
Nor will he be led on who should replace Lancaster in the prime CEO position by the shareholders, which include carmaker Bentley and Lancaster himself, who still has a 20% stake in the company.
“This decision…is a decision for the board,” said Walden. “It is not a decision for the shareholders.”
Industry observers expect the winner of the post, which provided Lancaster with a £312,000 basic salary plus bonuses, benefits and two company cars, to have significant motor retail experience.
But the rumour mill will continue to work overtime.
“I have no one in mind, we are doing a search and expect a good shortlist – this is a very attractive role,” said Walden.
“But we have not set a timescale that would be a foolish thing to do.”
Lancaster co-founded HR Owen in 1994, since when he had held the CEO post with a stated aim of making it “the Harrods of the motor retail industry”.
At its height, the group turned over more than £500m and had a broad spread of franchises for supercar and premium brands.
However in recent years Lancaster led the business through disposals and down-sizing to focus on its high-margin supercar brands, ending with a group that turned over only £125m last year.
Unfortunately for the company, its downsizing was finalised just as the recession sent that sector of the car market into freefall.
Walden who is now at the helm, at least until the new CEO is appointed, explained his thinking on how the company will now return to growth.
“Our used car operation has performed well over the past 18 months in both volume and prices,” he says. “We don’t have specific plans yet but we are exploring how we can grow in this area more than we have. The used area is one we are present in, one we perform well in and one where there is more opportunity for us.”
Any additional used car outlet, which is likely to be outside of HR Owen’s traditional London home, will remain true to its luxury and sportscar roots.
“We will increase our presence ,” confirms Walden.
“And, as I keep saying there is a world outside of London full of people who buy cars.”
However, any strategic decisions, such as opening a used car outlet, will be held off until the new CEO is in place.
While used car sales have held up well, Walden is also exploring the opportunities for more new car sales.
The company is cash rich – it has some £15m in the bank and no debts – so is well placed to acquire prime retail space for a new supercar showroom should it so wish to
“New cars is another area we are looking to expand. We want to explore this further,” says Walden.
“We have an excellent relationship with our existing franchisors and we are talking with them.”
Those talks will revolve around the possibility of opening a new showroom, again probably outside of London.
But while he is talking to his current franchisors, including Bentley Motors, which has a 28% stake in HR Owen, Walden is also open to selling other marques, although not volume brands and he has no plan to return to the brands the group exited while down-sizing.
“It is not inconceivable but I would say it will not be in the volume car market,” says Walden.
“But there are other franchises.”
The aftermarket arm of the prestige car dealer group’s operations has also performed well and has caught Walden’s eye.
“The aftermarket also offers attractive options for us,” he said.
“We have got options that many companies don’t have,” he says referring to the company’s cash reserves.
“Our plan is to grow, but measured growth we are not in a hurry and will go cautiously.
“The challenge is to make the right decisions and deliver value to our owners – the shareholders.”
Bentley Motors declined to comment on HR Owen’s changes, except to confirm it held a 28% stake in the group.