Group 1's East Coast dealers expect $2 million in inventory losses
Group 1 Automotive Inc.'s 24 East Coast dealerships are facing $2 million in inventory losses after Superstorm Sandy.
Group 1, the nation's fourth-largest dealership group, estimates it will incur a $250,000 pre-tax deductible charge for facilities damages in the fourth quarter and $2 million in inventory losses.
Flooding and falling debris ruined a number of vehicles, while some facilities had minor water damage, the company said in a statement.
The stores -- located in New Jersey, New York, Maryland, New Hampshire and Massachusetts -- represented 19.4 percent of Group 1's new vehicle sales in the third quarter, according to the company.
Business interruptions could range from a few days at Group 1's Boston-area locations to two weeks on Long Island in New York and in northern New Jersey.
"We are working to quickly assess and repair the damage at our dealerships in order to restore full operations for the local residents," CEO Earl Hesterberg said in a statement. "The largest hurdle at present is restoration of power and computer access at a number of the dealerships and the clearing of local roads."
Group 1, based in Houston, ranks No. 4 on the Automotive News list of the top 125 U.S. dealership groups with 2011 new vehicle retail sales of 102,022.
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