Renault Retail Group has sold its flagship London West showroom for £39m.
The Renault-owned company has agreed a short-term, two-year lease back on the premises on Concord Road, Western Avenue, London, while it relocates to another location.
The site currently sells new and used cars and represents Renault, Dacia, Alpine and Nissan brands.
The sale was reported in the group’s 2019 results, recently filed to Companies House.
Turnover in 2019 was £501.8m down from £545.5 the year before, with reduced losses of -£2.4m compared to -£3.5m in 2018.
Renault Retail Group said it ‘resisted’ 2019’s new car market 2.4 per cent decline ‘well’, and sold over one in five of all Renault and Dacia sales in the year. It said its new car departmental profitability plan ‘continued well’ with the year contributing close to £0.5m more return than in 2018.
Used car sales dropped by 12.5 per cent as the company said it continued to move away on its reliance on nearly new vehicles and increase its focus on older three-to-five-year-old cars.
‘Tactical and ex-management’ volumes fell by 39 per cent while volumes of ‘traditional’ used cars over 18 months old grew by 11 per cent.
The company said this new strategy also saw used car departmental profitability increase by £2.7m to £5.7m.
Renault Retail Group said during the first quarter of 2020, it developed its medium term strategy which is built on an ambition to return it to an average return on sales of one per cent by 2023.
It added that while business picked up in June after the ending of the first national lockdown in 2020 and ‘exceeded original budget expectations’, the half-year impact was a 45 per cent reduction in turnover year-on-year leading to a 45 per cent reduction in gross margin. This was offset, however, by a saving in expenses of 24 per cent leading to an operating profit impact of £3.3m reduction year-on-year.
Renault Retail Group concluded that due to the impact of the coronavirus pandemic, a fixed cost reduction programme will be delivered in two stages – the first being between July and December 2020 and the second during 2021.
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