Hurricane looms right as store is recovering from renovation

LAKE PARK, Fla. — August was supposed to be Earl Stewart Toyota of North Palm Beach's comeback month.

After its worst July in years, the Stewart family was ready for a reset. Their South Florida dealership had lost $100,000 on new-vehicle sales that month as it worked to recover its stride from a disruptive and just-completed $15 million store renovation.

"It should be the inverse of that," lamented Josh Stewart, the store's co-general manager and youngest son of dealership namesake Earl Stewart.

Thanks to service and parts, the dealership still netted a profit of $32,709 in July. And August's Labor Day sales events were expected to bring the store up to fighting shape for the fall.

Enter Hurricane Dorian.

Earl Stewart Toyota is about a thousand yards from the Atlantic Ocean, and its waters were calm as Labor Day weekend approached. The atmosphere inside the store was anything but.

As Dorian intensifies hundreds of miles off the Florida coast, distracted employees pace the store, asking to leave early to gather supplies, fuel cars and board up homes. Customer traffic slows. As weather forecasters upgrade Dorian's severity — it eventually rates as a Category 5 storm — there is a palpable effect on morale.

Earl Stewart judiciously allows anyone requesting time off to take it — though he notes the resulting pressure on those who remain behind to keep the lights on for potential customers. The Stewart family has been through numerous hurricanes — and they always stay open until a warning is issued, Earl tells a visitor.

In the service center, a newer employee pulls Josh aside. Worried about the storm, she wants to know whether she will still have a job should she have to leave to take over care of her children from her husband.

"I was like, 'Yeah of course, of course you'll have a job!' " Josh Stewart said. "We don't want the whole company to stampede out at once, but we always do the right thing."

The store's recently renovated showroom gleams on Aug. 29, utterly devoid of customers. Round desks and red chairs and couches sit beneath black monitors suspended from the ceiling like a sports arena jumbotron. Glassed-in offices surround the space, and an expansive control room housing store managers overlooks the showroom floor.

"Ask yourself the question: Unless you absolutely needed to buy a car right now, wouldn't you rather wait three or four days after the storm has passed?" Josh said, even as he questions the hype that surrounds hurricane coverage.

On a flat screen in the service waiting area, live Dorian coverage is broadcast all day. Customers come in waves, sometimes around 10 people, sometimes just one or two, but their eyes all end up locked on the red swirling graphic on the screen.

"This is the August clearance event, it's a Toyota thrust month, it's Labor Day weekend. It's a perfect storm of what should be a fantastic sales close, and instead — Hurricane Dorian is bearing down on us," Josh said.

And the dealership could really use the lift. Traffic suffered during the first half of 2019 as the dealership wrapped up its two-year construction project. Sales took a hit.

Historically, Earl Stewart Toyota had exceeded new-vehicle sales targets set by Southeast Toyota Distributors as part of its stair-step bonus program by a large margin, coming in around 122 percent of objective, Stewart said. But for the past two years, during construction, the dealership has only just cleared its objective — averaging 106 percent.

Once the target is satisfied, a dealership earns $225 for every new vehicle sold, according to the Stewarts. Every vehicle sold beyond the target number earns $500. It adds up.

"We've been struggling, and there's a lot of reasons," Josh said.

Managers gather in the control center, dividing the labor of preparing for a storm.

First order of business: Remove customer cars or at least, if they're immobile, try to place them out of harm's way. The store is liable for any damage a customer's vehicle incurs on the property — even from acts of God.

They next pack the dealership's parking garage with inventory vehicles starting with the most valuable — Land Cruisers, used Mercedes and BMWs.

This is the third hurricane for assistant comptroller Sean Gebhard, who helps move those vehicles to safety.

"We're just going to jam them. We can probably squeeze in another 40 cars," he said.

The store carries 600 vehicles — 400 new and 200 used. They won't all fit in the garage, so many vehicles will remain exposed.

Other than securing loose items on the lot, not much more needs to be done.

"Every window is hurricane proof; our doors are hurricane proof — all we have to do is lock up the doors," Gebhard said.

When Dorian began idling over the Bahamas, people were alarmed — though a watch hadn't yet been issued in Palm Beach.

On a normal Friday, the service area at the store has lines of customers snaking around the long hallway. On Aug. 30, the room is empty but for a few bored service advisers scrolling on their phones.

At the same time, Earl Stewart is being slammed in private messages via a website that allows customers and employees to send anonymous messages directly to the family. Stewart uses the site as a tool for feedback before management meetings. His mandate: One of the Stewarts will always respond.

The missives on this day are a little different.

Whether warning, watch or tropical storm, the dealership should close until the storm clears and heavy rains lift, one messenger argues.

"No other job will be open. It truly makes you wonder if Earl Stewart values the safety of his employees in these conditions. You can afford to close for a few I'm sure. What if the hurricane does decide to do a last-minute turn toward us and we are stuck? Nobody wants to be at Toyota. They'd rather be with their families!"

Another implores Earl to be a leader and close. The employees respect Stewart "tremendously," and they'll show up to work just to please him.

"The public doesn't see this as good," the sender went on. "It just looks greedy. Very greedy."

Yet another messenger writes: "Thanks for giving me someplace to go and something to do yesterday. I was bored to tears sitting around the house."

As business slumped during the two-year renovation, the Stewarts took a hard look at costs, making significant cuts, particularly in advertising and personnel, said Stu Stewart, Earl's oldest son and co-general manager.

A used-car manager was demoted to sales, and a new-car manager was relocated to the used-vehicle department. The dealership began to work on an extensive pay plan cut.

"We are still struggling how to — without blowing hundreds of thousands of dollars on advertising — grow our volume. We've struggled in our Internet sales department, and we've gone through a revolving door of managers there," Stu Stewart said. "We've watched our F&I numbers get worse."

The storm isn't helping. But even as around-the-clock Dorian coverage inflames locals' fears, it also normalizes them. With home preparations complete and the storm stalled over the Bahamas, some residents begin to venture out to run errands — such as vehicle service appointments.

Christie and Michael Gidos come to the store to fill out paperwork to lease a 2019 Toyota Tacoma. A Facebook ad drew them in.

"I'm not buying anything until after the storm," Michael Gidos said. "I'm pretty caught up at the house right now, so now I'm just waiting to see if it turns."

In the end, Dorian shifted north and never made landfall in Florida. But the damage had already been done.

Though better than July's performance, August sales for Earl Stewart Toyota came in far below expectations. The dealership sold 232 new vehicles, 50 less than anticipated, losing $40,196 in that department. It sold 149 used retail vehicles and lost $20,356 on them.

For the month overall, the store made $102,356 — about half of what they planned for.

Because of the hurricane, Southeast Toyota Distributors lowered dealerships' incentive objectives for the month, according to the Stewarts, lowering the target for Earl Stewart Toyota by 30 vehicles. This allowed the store to come in at 108 percent of target and earn the bonus money.

Stu Stewart reflected on the storm's "remarkable psychological impact."

"It's not every day that we get a Category 5 hurricane that's bearing down on us," Stu said. "It kills business — even if it's not going to hit us."