After selling to the publics, these dealers have returned to retail
After 40 years of hawking cars, sewing machines and vacuums, and then cars again, Ira Rosenberg couldn't stop selling -- even after signing off on the largest deal of his life.
When Rosenberg and his son sold their five-store Massachusetts dealership group to Group 1 Automotive Inc. for a multimillion price in 2000, Rosenberg retired to Florida to take care of his ailing wife. But he continued to dabble in business, as an unsuccessful distributor of videoconference telephones and a restaurateur.
"After about 4 1/2 years of being retired, I couldn't stand it," Rosenberg, now 76, said. "I said to my wife: 'I can't handle it anymore. Let me go back to work or give me a lobotomy.'"
So in 2004 he bought a Toyota dealership in Maine and returned to the dealership floor, where he had wanted to be all along.
Rosenberg isn't the only dealer who sold to a public group and then staged a comeback.
Dozens of retailers who sold out, particularly during the early years of consolidation, have gotten back into the game, sometimes right away. Some worked for the public companies that acquired their stores or tried retirement or other business ventures first. But they all found it hard to stay away from the entrepreneurial world of auto retailing.
The reasons are many. Some regretted selling and wanted to run their own businesses again. Some wanted to set up dealerships for the next generation to operate. Many sold when they were in their 40s and 50s and found they didn't like working for someone else.
Dealer consultant Alan Haig has seen many of those dealers come full circle. Haig, a former AutoNation Inc. executive, worked with them when they sold their stores. And in his current role handling dealership transactions for Presidio Group of San Francisco, he has helped some buy new stores.
"They've spent decades developing their ability in auto retail, and they have a lot of energy left," Haig said.
It can be hard to let go of the lifestyle of a dealer.
"His name is on the door, he wins trips, he's written about in the newspaper -- he's a big cheese in his community," Haig said. "When he sells his company to a big publicly traded firm, he is no longer the big cheese."
It's also lonely outside the dealer fraternity. "It's supportive, it's fun and it massages their ego," said Loyd Rawls, an Orlando consultant who advises dealers on succession planning.
Perhaps most important, few other industries provide the return on investment and cash flow of auto retailing. And with more than 17,000 dealerships out there, former dealers can re-enter the business relatively easily.
"They understand the automobile business, they understand the risk and rewards, and they have developed a level of resilience to the frustration," Rawls said. "When they take that money they get from selling and invest it in the markets, most are dealing with something they know nothing about. They're a small fish in a very big ocean. So they gravitate back to the auto business."
Entrepreneurial drive explains Mitch Pierce's comeback. After selling his Tempe, Ariz., stores to Republic Industries, AutoNation's forebear, for $48 million in stock in 1997, Pierce ran the public company's Arizona and Nevada markets for six years.
"At the end of the day, I just missed having my own company and taking the risk and building the team and the relationships," said Pierce, who owns his current stores mainly with ex-football great John Elway. "We're in the people business and the relationship business."
Elway is one of the industry's best-known comeback stories. He also sold his Denver-based group to Republic in 1997. Elway and Pierce first teamed up in 2004 on a California Toyota store.
Other well-known dealers who have gotten back in the game include Arkansas dealers Steve Landers and Mack McLarty, who sold to major public groups. They later joined forces to create what is now known as RLJ McLarty Landers Automotive Holdings, the nation's 19th-largest dealership group.
"We competed against each other for years and ended up becoming partners," Landers said. He stepped down as president of RLJ McLarty Landers on Jan. 1 but continues to own stores with his son.
For many dealers, selling to the publics meant millions of dollars in the bank and the ability to take care of their families for generations.
Tom Hessert was looking for that assurance when he sold nearly all of his New Jersey dealerships to UnitedAuto Group in 1998.
"I elected to take the money off the table for the security of my family forever," said Hessert, who eventually bought back some of his stores. "I figured I would be able to go back and purchase dealerships later on."
But setting up the next generation is also a reason to return.
Jim Nalley of Atlanta sold his Atlanta-based dealership group to Asbury Automotive Group in 1997, when his three sons were in their 20s. Nalley continued to run the stores for the public company, and his sons worked at Asbury. But by 2006 they were itching to run their own stores. Nalley stepped in with financing and some advice.
"I'm sure it was a shock to them," Nalley said of the sale of the dealership group, which had been in the family for nearly 80 years. "But I think it's working out for them."
You can reach Amy Wilson at email@example.com.