Asbury Automotive Group Inc. sold its South Carolina Lexus dealership in September to comply with the luxury brand's cap on how many stores the dealership group is allowed to own in a region.
The divestiture was prompted by Asbury's $735 million acquisition in August of the majority of Park Place Dealerships, which included two Lexus stores in Dallas. That gave the nation's seventh-largest retailer six Lexus stores across its network, including the Greenville, S.C., store, one Lexus dealership in St. Louis and two Lexus outlets in metro Atlanta.
Lexus's framework agreement with Asbury allows the group to own six stores across the country. And if all six stores are high-performing, Asbury CEO David Hult said, Lexus allows a dealership group to operate up to eight stores.
But the framework agreement has another wrinkle, Hult said: The dealership group cannot operate more than four locations in the same area of the country.
"I knew right away we had an issue, because we now had five stores in one region," Hult told Automotive News last week. "From Atlanta to Dallas, it's almost 1,000 miles. Even though it's 1,000 miles apart, it's still one region. We had a choice of selling one of three stores, and the choice was Greenville."