DriftGirlNovember 5, 2007
#103795The (bright) Future of Autobacs in the U.S.
The company, which acquired Strauss Discount Automotive earlier in the year, is aggressively pursuing its unique type of retail outlets in the United States, says Koichi Sumino, president and CEO Autobacs SevenIn pinpointing the U.S. auto enthusiast, he says there are two types: those who like to spend a lot of money on their vehicles, and those who use their vehicles merely as a means of transportation. Autobacs has been known to focus on the former.
After the acquisition of Strauss Discount Auto for $55 million in early May, in an attempt to bring Strauss out of bankruptcy, Autobacs made the decision to launch a number of modest stores in the United States under the moniker of Autobacs Strauss. The purchase covers more than 90 stores in New York, New Jersey and Philadelphia.
Although Autobacs has a "super store" in existence in Stanton, Calif., and the retailer is known for its flashy trappings, like ornate show floors and movie theaters, the new stores will be built in all different sizes, said Joe Catalano, COO of Autobacs Strauss.
For now, most of Autobacs Strauss' business will be run out of existing Strauss Discount Auto locations. Company officials estimate the company will open new stores in 2009.
Autobacs Strauss intends to increase store sales 50 percent by 2009, as well as increase its inventory from $260,000 per store to $500,000 per store by that point.
Autobacs has 115 stores in Japan, as well as 10 stores in China and two stores in Thailand, but Koichi admits that the market is shrinking in Japan, which most likely is spurring the quest for other countries.
Company officials believe Autobacs can take advantage of Strauss' wholesale reach, while Koichi says the first priority of the newly formed company is to straighten Strauss' financial woes. The second phase will involve imbuing existing Strauss stores with the Autobacs flair.
Because the company has taken out a substantial line of credit (much more than used in the Strauss purchase) Koichi doesn't rule out the purchase of other stores. "If there is a good offer, at the right time and at the right price," Autobacs will consider purchasing other stores.
The California store took four years to break even with financially, admits Koichi. When asked how the deal has worked out, he answers, "So far, so good. For the last six months, we are happy with the results."
The reorganization plan calls for a 100 percent payout to general unsecured creditors in five payments over three years. The plan also calls for Glenn Langberg, Joe Catalano, and other key management to hold leadership positions in new Autobacs Strauss.
One of the biggest challenges in purchasing Strauss was convincing Autobacs' upper management to make the purchase, says Koichi.
Eventually, he says, East Coast and West Coast stores will meet somewhere in between."We know it takes a long time, at least 10 years," he adds.
Earlier it was reported Autobacs intends to boost domestic sales, including those at its franchised stores, to approximately $3 billion by fiscal 2008 from the fiscal 2006 level of $2.5 billion.
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The company, which acquired Strauss Discount Automotive earlier in the year, is aggressively pursuing its unique type of retail outlets in the United States, says Koichi Sumino, president and CEO Autobacs Seven In pinpointing the U.S. auto enthusiast, he says there are two types: those who like to spend a lot of money on their vehicles, and those who use their vehicles merely as a means of transportation. Autobacs has been known to focus on the former. After the acquisition of Strauss Discount Auto for $55 million in early May, in an attempt to bring Strauss out of bankruptcy, Autobacs made the decision to launch a number of modest stores in the United States under the moniker of Autobacs Strauss.[B] The purchase covers more than 90 stores in New York, New Jersey and Philadelphia. [/B] Although Autobacs has a "super store" in existence in Stanton, Calif., and the retailer is known for its flashy trappings, like ornate show floors and movie theaters, the new stores will be built in all different sizes, said Joe Catalano, COO of Autobacs Strauss. For now, most of Autobacs Strauss' business will be run out of existing Strauss Discount Auto locations. Company officials estimate the company will open new stores in 2009. Autobacs Strauss intends to increase store sales 50 percent by 2009, as well as increase its inventory from $260,000 per store to $500,000 per store by that point. Autobacs has 115 stores in Japan, as well as 10 stores in China and two stores in Thailand, but Koichi admits that the market is shrinking in Japan, which most likely is spurring the quest for other countries. Company officials believe Autobacs can take advantage of Strauss' wholesale reach, while Koichi says the first priority of the newly formed company is to straighten Strauss' financial woes. The second phase will involve imbuing existing Strauss stores with the Autobacs flair. Because the company has taken out a substantial line of credit (much more than used in the Strauss purchase) Koichi doesn't rule out the purchase of other stores. "If there is a good offer, at the right time and at the right price," Autobacs will consider purchasing other stores. The California store took four years to break even with financially, admits Koichi. When asked how the deal has worked out, he answers, "So far, so good. For the last six months, we are happy with the results." The reorganization plan calls for a 100 percent payout to general unsecured creditors in five payments over three years. The plan also calls for Glenn Langberg, Joe Catalano, and other key management to hold leadership positions in new Autobacs Strauss. One of the biggest challenges in purchasing Strauss was convincing Autobacs' upper management to make the purchase, says Koichi. Eventually, he says, East Coast and West Coast stores will meet somewhere in between."We know it takes a long time, at least 10 years," he adds. Earlier it was reported Autobacs intends to boost domestic sales, including those at its franchised stores, to approximately $3 billion by fiscal 2008 from the fiscal 2006 level of $2.5 billion.