6:11 am, March 9, 2024
Peter Vardy has sold six franchises to Arnold Clark as he attempts to move his business away from volume car sales and focus on more profitable areas.
Speaking at Car Dealer Live on Thursday (March 7), Vardy said he was transitioning his business towards three new more profitable pillars – premium franchises, his Car Money finance brokerage and rental.
His sites in Aberdeen, Kirkcaldy and Edinburgh – which included three MG, two Omoda and one Ora franchise – all transferred to Arnold Clark at the start of this month.
It will leave Vardy with BMW, Mini, Jaguar Land Rover and Porsche franchises and one Omoda franchise which will sit within his remaining used car site at Motherwell.
Vardy said he made the decision as he needs to create ‘a better return on investments’ and the volume market was not doing that for him.
Vardy was the first headline speaker at Car Dealer Live at the British Motor Museum and he talked about how he’s had to make these difficult decisions for the good of the business.
He said it was hard to lose people from his business but has worked as hard as possible to find them new roles within the group where he can.
Vardy said he was now excited for the future and confident the ‘better margins will create better multiples’ for his business.
‘We need to create value at every step and in the dealer world the returns are one to two per cent,’ he said.
‘I love premium and they are more sustainable and the returns are stronger and I will be looking for more premium franchises.’
Arnold Clark CEO Eddie Hawthorne told Car Dealer: ‘With the changes that Peter was making to his business, we were able to work closely with him and ensure he was able to follow his plans quickly with minimal disruption to staff and customers.
‘We are extremely pleased to take on the three Vardy MG sites which provides Arnold Clark with an excellent opportunity to expand with one of our existing partners.’
During Vardy’s headline interview, he explained the decisions he had made had been difficult, but they were important to secure the best return on his family’s investment.
He said he made the decisions at the start of this year so those he couldn’t offer a job had the best opportunity to find another, and he said he was pleased many had done so.
Vardy will now be developing his Car Money car finance brokerage business which he says is more tech focussed and offers far higher margins – ‘in the region of 27-28%’.
‘While I don’t want to sell I need to think about creating more value in the business and where volume dealerships are valued at around 2-3 times multiples, tech businesses like this are more like 10 times,’ added Vardy.
‘We are also rapidly growing our van rental business – we have 1,200 vans now and that will grow to 1,500 very soon.’
The extensive headline interview and the other sessions from Car Dealer Live can be watched back on the event website with a replay ticket.
A date for next year’s event will be announced in due course.
