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HR Owen resignations ‘no surprise’ to chairman

The recent high profile resignations of several board members was “no surprise”, said Jon Walden, chairman of the supercar franchise dealer group HR Owen.

Its boardroom is a very different place now after a series of dramatic departures. First chief executive Nicholas Lancaster left after 16 years with the group.

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 a change was needed to move forward.

“Reshaping our board is an ess-ential ingredient of moving the company into the next phase of its development,” he said.

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 for the board,” said Walden.

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.

“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 time scale, that would be foolish.”
Lancaster co- founded HR Owen in 1994, when he held the CEO post with a stated aim of making it “the Harrods of the motor retail industry”.

At its height, the group had a turnover of more than £500 million.

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 ended just as the recession sent the market into freefall.

Walden who is now at the helmuntil 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”.

“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.However, any strategic decisions, such as opening a used car outlet, will be held off until a 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.

“New cars is another area we are looking to expand. We want to explore this further,” said 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, probably outside of London.

While he is talking to his current franchisors, including Bentley Motors, which has a 28% stake, 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 downsizing.

“It is not inconceivable, but I would say it will not be in the volume car market,” said Walden. “But there are other franchises.”

The aftersales operations, including a BMW service franchise has also performed well and has caught Walden’s eye. “The aftermarket 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.

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