Lookers plc

views updated

Lookers plc

776 Chester Rd., Stretford
Manchester
M32 0QH
United Kingdom
Telephone: +44 161 291 0043
Fax: +44 161 864 2363
Web site: http://www.lookers.co.uk

Public Company
Incorporated: 1908 as Lookers Limited
Employees: 3,306
Sales: £1.01 billion ($1.9 billion) (2004)
Stock Exchanges: London
Ticker Symbol: LOOK
NAIC: 441110 New Car Dealers; 423110 Automobile and Other Motor Vehicle Merchant Wholesalers; 423120 Motor Vehicle Supplies and New Parts Merchant Wholesalers; 423820 Farm and Garden Machinery and Equipment Merchant Wholesalers; 423830 Industrial Machinery and Equipment Merchant Wholesalers; 441221 Motorcycle Dealers; 441310 Automotive Parts and Accessories Stores; 447110 Gasoline Stations with Convenience Stores

Lookers plc is one of the United Kingdom's top five new and used car dealers. The Manchester-based company operates a national network of car dealerships, featuring a wide range of car makes, including the volume brands Vauxhall and Renault, among others. The company also has dealerships for a number of high-end makes, including Ferrari in Northern Ireland and Jaguar in Northern Ireland and Scotland. Other brands in the company's stable include Aston Martin, Audi, Bentley, Citroën, Chrysler, Honda, Jeep, Land Rover, Lexus, Maserati, Mazda, MG Rover, Nissan, Peugeot, Saab, Seat, Toyota, and Volkswagen, as well as motorcycle dealerships for BMW, Ducati, Honda, and Kawasaki. The company also sells agricultural vehicles, equipment and machinery, and operates the United Kingdom's leading wholesale auto parts distributor, FPS Distribution. Lookers has been engaged in an aggressive acquisition drive since the mid-1990s, beginning with its acquisition of Northern Ireland's leading automotive dealer, Charles Hurst. That company remains Looker's Northern Ireland division. In Scotland, the company operates under the Taggarts Motor name. Lookers is listed on the London Stock Exchange. In 2004, the company's sales topped £1 billion ($1.9 billion).

Automotive Sales Industry Pioneer in the Early 1900s

The appearance of an automotive industry at the beginning of the 20th century quickly inspired the creation of a new industry: automotive sales dealerships. Among the earliest of this new kind of retailer was the company that became known as Lookers. Founded in 1908, Lookers became a prominent car seller in the Manchester area. The company came to represent a number of automobile makers, including smaller, regional manufacturers. Yet Lookers later became especially associated with the stable of makes owned by British Leyland, which represented the majority of Lookers sales into the late 1970s. The company was also active in related areas, such as car repair, as well as sales and engineering of agricultural equipment and machinery.

Lookers went public in 1973, at a time when its sales were just £23 million. The company almost immediately faced a threat, when in 1974, Graylaw Holdings launched a takeover offer. Lookers rejected that bid as too low. Instead, the company began to plot a new growth course. In 1978, it acquired R. Platt & Sons and Platts Agricultural Machinery Exports, boosting its operations in that area.

The slump in auto sales at the end of the 1970s had prompted Lookers to adopt a more significant change in strategy. The company decided to diversify its product offering beyond its reliance on British Leyland makes, adding Talbot, International Harvester, Vauxhall, Peugeot, Fiat, and Mercedes Trucks. The company also began its first acquisitions, taking over, for example, Tipton and Morley, an agricultural engineering company, and a Toyota dealership, both in 1980. By then, British Leyland sales accounted for less than half of the company's total revenues. Among other areas, the company built up a business selling vacation caravans, operating holiday parks, while also boosting its sales of aftermarket car parts.

Lookers strengthened its Vauxhall dealerships with the acquisition of the Braid group, a major dealership group based in Liverpool, for £3 million. That purchase was completed in 1983. By the end of 1984, the first full year including Braid, the company's sales topped £150 million.

Lookers' drive to diversify its dealerships led it to continue acquiring dealerships over the next decade. An important purchase for the company came in 1989, when it acquired SMAC Continental, based in the Southeast, for £14.7 million. That purchase also added SMAC's Mercedes dealerships to Lookers portfolio of makes.

By the beginning of the 1990s, the company's turnover had topped £370 million. Lookers was hit hard by the economic recession at the beginning of the decade, watching its new car sales slide some 30 percent, while sales of farm vehicles and machinery plunged into an extended slump. Another area of business hit hard by the recession was the group's sales of new caravans. Yet Lookers' strong car parts and service arm, particularly in the north, helped compensate for its slipping car sales.

The company continued its acquisition drive into the 1990s. By the middle of the decade, the company boasted more than 50 dealerships in the United Kingdom. Nonetheless, Lookers remained associated primarily with the northern region. This changed in 1996 when the company acquired the Charles Hurst Group. Founded in 1911, the Charles Hurst Group grew to become Northern Ireland's dominant automobile seller, with a market share of some 22 percent. The addition of the Hurst dealerships also gave Lookers a new prize, the Ferrari concession for Northern Ireland.

Joining the Top Five in the New Century

Lookers maintained the Charles Hurst name because of its prominence in Northern Ireland, and quickly began steering part of its acquisition program through the Hurst Group. By the end of 1996, Hurst had made its first acquisition for Lookers, buying Baird Cars in Belfast for £2.7 million. In 1998, Hurst added Neville Johnston Garages, also in Belfast, and its Toyota and Daihatsu dealerships, for £3.3 million.

Lookers itself remained an aggressive player in the consolidation of the British motor vehicle sales market. The acquisition of Hurst had boosted it into seventh position among the top 200 British automobile sellers. The company's fast-growing automotive component encouraged Lookers to exit other areas of operations, such as caravan sales and the operation of holiday parks, sold in 1997.

Meanwhile, Lookers began an investment program, which included the opening of a £4.5 million dealership in Stretford, for sales of Suzuki, Seat, and Mazda cars, in 1999, and investments totaling £20 million in order to open new showrooms in Chester, Liverpool, and Oldham in 2001. The company added a number of existing dealerships as well, such as 452 (Birmingham) and Spekehall Vauxhall, both bought from Vauxhall Motor, and Rystar Aston and Selly Oak Vauxhall, bought from Ryland Group, in 2002. Lookers further strengthened its Vauxhall network that year with the purchase of Elt Brothers, based in Birmingham, for £900,000. In 2002, also, Lookers teamed up with supermarket group Morrisons in an experiment to sell cars from Internet displays in three Morrisons stores.

By 2003, Lookers' network of dealerships had topped 90. The company had built up an extensive network throughout England and Northern Ireland. In that year, Lookers completed its United Kingdom presence with a move into Scotland when, through Hurst, it acquired JN Holdings, better known as the operator of the Taggarts Motor Group in Glasgow and Motherwell. The addition of Taggarts also gave the company a new Jaguar franchise.

Company Perspectives:

"… with Lookers plc, it's not necessary to stake your reputation on a company that doesn't have one." There are any number of competent motor dealerships in the UK, and most of them would fall over themselves to handle your business. Somewhat less easy to find, however, is a dealer more concerned with your needs and requirements rather than simply its own profits. In other words, a dealer that has been around for longer than ten minutes, and understands that in business you need a company that is flexible, reliant, honest and helpful. In short, a dealer like Lookers plc.

Key Dates:

1896:: Taggarts Motor Group originates as a cycle shop in Motherwell, Scotland.
1908:: Lookers Limited is founded in Manchester, England.
1911:: Charles Hurst Group is formed in Belfast, Northern Ireland.
1973:: Lookers goes public on the London Stock Exchange.
1978:: Lookers acquires R Platt & Sons and Platts Agricultural Machinery Exports and launches diversified car dealership strategy.
1980:: Lookers acquires agricultural machinery group Tipton and Morley and a Toyota dealership.
1983:: Braid Group in Liverpool is acquired.
1996:: The company acquires Charles Hurst Group, launching a new acquisition drive.
2003:: The company enters Scotland with the purchase of Taggarts Motor Group.
2005:: Lookers acquires used car supermarket Bristol Trade Centre.

In August 2004, Lookers made another significant acquisition, this time boosting its presence in the U.K. aftermarket car parts circuit, when it bought FPS Distribution. Founded as Ferraris Piston Service by the Ferraris brothers in Cricklewood, in north London, in 1928, FPS grew into a national chain during the 1980s after being acquired by Tomkins Plc. By the beginning of the 2000s and a series of owners, however, FPS had fallen into financial troubles, before being rescued in a management buyout in 2001. The addition of FPS transformed Lookers into the United Kingdom's leading distributor of wholesale aftermarket auto parts.

Other dealerships acquired through the end of 2004 included Savoy Honda in Warrington; Vauxhall dealerships in Lisburn and Portadown; Darlington Volkswagen; another Volkswagen dealership in Northallerton; and a Saab dealership in Chester. In February 2005, Lookers added the four-acre used car "super-market" Bristol Trade Center, paying £8.5 million. By then, the company's sales had topped £1 billion, placing the group among the country's top five car dealerships. Lookers expected to remain a prominent participant in the ongoing consolidation of the British car sales market.

Principal Subsidiaries

Charles Hurst Group; FPS Distribution; Taggarts Motor Group.

Principal Competitors

Inchcape PLC; Pendragon PLC; Imperial Holdings Ltd.; Renault UK Ltd.; Reg Vardy PLC; Arnold Clark Automobiles Ltd.; RAC PLC; C D Bramall Ltd; Citroën UK Ltd.; Camden Motors Ltd.; McCarthy Ltd.; Dixon Motors PLC.