New retailer plans fast expansion into luxury

A new dealership group is forming in Southern California determined to expand aggressively in the luxury retail space.

But as it comes to life, the group's veteran leader is also involved in a lawsuit against his former partner and employer, Fletcher Jones Jr. and Fletcher Jones Motorcars Inc.

Garth Blumenthal, CEO of Unstoppable Automotive Group, is a pursuing a $100 million lawsuit against Jones, filed in July 2018. According to a post on the website of his lawyer's firm, the suit claims Blumenthal was terminated "without warning in 2017, in breach of various promises and agreements they had made over the years."

Jones owns luxury dealerships in California, Hawaii, Illinois and Nevada.

Blumenthal declined to comment on the case, while his lawyer, Alan Greenberg, did not respond to requests for comment. A lawyer representing Jones and Fletcher Jones Motorcars declined by email to discuss the case.

Last year, the California Court of Appeal for the Fourth District, Division Three, denied Jones' motion to compel arbitration and sanctioned Arent Fox LLP and Fisher Phillips LLP, two of the firms representing Jones, $40,000, the Daily Journal reported.

According to the Superior Court of California, County of Orange website, a motion for summary judgment and or adjudication will be heard on Aug. 6, a mandatory settlement conference is set for Dec. 17 and a jury trial set for Feb. 21, 2022.

Despite the lawsuit, Blumenthal has a clear goal for Unstoppable: He wants to expand the group's holdings to 20 stores through acquisitions over the next five years.

Unstoppable put that plan in motion in March when it bought Audi Mission Viejo and Volvo Cars Mission Viejo in California from GSM Auto Group.

Unstoppable also includes Mercedes-Benz of Temecula in California, which was an open point that Blumenthal and Jones partnered on and opened in 2014. Blumenthal owned 51 percent, while Jones owned the other 49 percent, Blumenthal said.

"We had the business together until 2019 at which point I bought out his remaining interest," Blumenthal told Automotive News.

Blumenthal has been involved with Mercedes-Benz dealerships since 1980. His management team at Unstoppable includes executives with experience at Lithia Motors, AutoNation and Mercedes-Benz USA. Blumenthal declined to name the executives.

"The idea behind all of it is to grow the group and to acquire other luxury dealerships," Blumenthal said. "We have a very strong relationship with Mercedes-Benz for the past 40-plus years. Now we're working with Audi, Volvo and having some discussions with a few other manufacturers that we would consider very high-end luxury.

"We're looking to expand our grip beyond Southern California," he added. "We are looking at Florida, Tennessee and Texas and some other places. We're looking to have a bicoastal presence and looking to try and acquire up to 20 dealerships over the next five years."

Blumenthal said that the group would ultimately like to have its head office in Florida. The group has around 230 employees but is growing, he said.

Unstoppable has investors, but Blumenthal declined to name them.

Blumenthal started as a sales consultant at a Mercedes-Benz dealership in his native South Africa in 1980. He moved to California in 1983 and was a sales consultant at the Mercedes-Benz dealership in Newport Beach, Calif., which was owned by Jim Slemons, and later became a sales manager there. Blumenthal then moved to Caliber Motors, a Mercedes-Benz dealership in Anaheim Hills, Calif., where he was general sales manager for two years.

In 1991, Blumenthal met Jones, who had acquired the Jim Slemons Mercedes-Benz dealership out of bankruptcy court. Jones hired Blumenthal as the general sales manager when the store reopened as Fletcher Jones Motorcars in December 1991. Blumenthal became the general manager in 1994 and held that position until 2017, while also helping launch and run the Temecula store in 2014.

From 1999 through 2017, he helped make the Newport Beach store Mercedes' top performing U.S. dealership based on new-vehicle volume, preowned-vehicle volume and fixed operations, he said. He noted that the Newport Beach location has remained the top performing Mercedes store since he left.

Unstoppable doesn't have any additional dealership transactions under contract at the moment but is actively shopping, Blumenthal said. Brands such as Land Rover and Porsche are desirable to the group.

"It's a pretty strong seller's market," Blumenthal said. "And with the publics very active in the space, it is challenging. But I think that some private owners that maybe either don't have a succession plan or are considering getting out and selling their business at a strong multiple, may want to pass on their business to a private company" instead of a large public group, he said.

"We're hoping we can get into that niche space."