In 1988, a young mechanic approached auto dealer Ray Brandt about converting a vacant building in a rough area near New Orleans into a body shop.
It was a novel idea and a gamble for the retailer, given that collision repair is capital intensive. But Brandt's bet paid off.
Over the past three decades, the venture mushroomed into a business with six locations and 140 employees in Louisiana and Mississippi and annual sales of $30 million. The original body shop has expanded to occupy a city block in suburban New Orleans and does $800,000 a month in sales. As for the young mechanic who pitched the idea: He's managing the business.
Ray Brandt Auto Group, headquartered in Harvey, La., is a rarity. Fewer than a fourth of U.S. dealership groups also have body shops, according to the National Automobile Dealers Association. Many retailers are scared to enter the body shop business because it is capital intensive and highly competitive, said Brandt, a member of the Nissan National Dealer Advisory Board.