Republic Industries has hired away Sears' top marketing executive and handed him a $400 million advertising and marketing budget to make AutoNation USA a national brand.
John Costello, a senior executive vice president and general manager of marketing at Sears, Roebuck & Co., will become president of Republic Jan. 1. He will direct the company's marketing efforts and oversee its automotive retail and rental businesses.
His chief job will be to further the AutoNation USA name, which the company recently began adding to some new-car dealerships, said Steven Berrard, Republic's co-CEO and current president, in a Dec. 4 interview.
Berrard will drop the title of president when Costello comes on board, but he will continue to oversee the strategic direction of the company, which is based in Fort Lauderdale, Fla.
Said Costello: 'Personally, it's an opportunity to join an exciting company in one of the most important industries in the world.'
With 40 AutoNation USA used-car superstores, 246 new-car dealerships and two major rental companies (National Car Rental Systems and Alamo Rent-A-Car Inc.), Republic has reached 'critical mass,' Berrard said.
'Now it's time to build a brand name,' he said. Republic wants to promote the AutoNation USA name through national advertising.
Costello, 52, is a respected brand manager credited with turning around Sears with his work on the 'Softer Side of Sears' advertising campaign and other promotions. At Sears, Costello worked with a $1.5 billion marketing budget. Costello also worked on the sharing of best retail practices throughout Sears.
Republic chose Costello because of his success in revitalizing the Sears name in 'Middle America,' according to Berrard. 'Mr. Costello is used to building a brand image with the same type of customers that come to our stores,' he said.
Eleven years ago, Berrard and Republic Chairman H. Wayne Huizenga used a similar strategy at Blockbuster Entertainment Corp. After the video rental chain reached an effective size, they brought in Thomas Gruber from McDonald's Corp. to build the brand. Gruber, who has since retired, also worked on the creation of AutoNation USA.
Republic recently modified its brand strategy when it began adding the AutoNation USA name to 18 new-car dealerships in the Denver area. Before that, Republic had operated its new-car dealerships under their existing names.
Berrard said the company is considering similar actions in other markets, but is still evaluating results from Denver.
Costello said joining Republic gives him the opportunity to build a new customer-driven business and create a new national brand with AutoNation USA. Costello said he wants input from Republic officials, dealers and automakers before he decides how to accomplish that.
'It's my sense that Republic has a good foundation, but I want to look at everything as part of the transition,' he said.
Larry Light, president of Arcature LLC in Stamford, Conn., and a brand consultant to the auto industry, said Republic needs to build a national image in automotive retailing, but it will take more than national advertising. Every contact with a consumer must be consistent.
Said Light: 'They will miss out on a major business opportunity if they fail to build the brand AutoNation.'