Purchasing a store from AutoNation is no bargain

AutoNation's 1997-1998 buying binge made it the undisputed dealership consolidator champion. Last year, however, the mighty corporation became something of a seller rather than a buyer of automotive retail points.

It was done quietly, but AutoNation sold off more than 20 individual dealerships. These were stores that came as part of groups that were either too removed from the company's other stores or needed too many capital improvements, say sources.

Gordon Stewart Sr., president of the Garden City, MI-based Stewart Management Group, was one beneficiary of AutoNation's desire to fine-tune its operations.

Mr. Stewart picked up Hoover Toyota in the Birmingham, AL suburb of Hoover after six or seven months of negotiations. It is the largest Toyota store in the state.

The reason for the sale, says Mr. Gordon, is that AutoNation "didn't have a plan for Alabama."

The Hoover store, which was only part of AutoNation for a little over a year, is the Stewart organization's first Toyota franchise. His operations in Michigan, and Tampa and Jacksonville, FL all are named Gordon Chevrolet.

"They had a whole fleet of MBAs working for them who were the most knowledgeable people I've ever dealt with," says Mr. Stewart, recalling how the deal was made with AutoNation. "That made it a very profess-ional relationship.

"They didn't give it away," he notes. "They know what things are worth. I'm bragging about the store I bought but not the bargain I got."

Still, AutoNation lost a "significant" amount of money on the transaction compared to its original acquisition cost.

Hoover Toyota did approximately 2,000 new and used vehicles each year. Mr. Steward expects it to get up to 6,000 vehicles by 2003.

"The Hoover store had wonderful people and we kept them all," says Mr. Stewart.

Unlike other consolidators, the Stewart Management Group's strategy isn't based on critical mass. But it did get him onto the Ward's Dealer Business Top 100 Megadealer list this year.

"We don't plan to dominate a market," says Mr. Stewart. "We're looking for more balance product-wise and geographically. We're not wildly chasing acquisitions, but I'd say we're in a managed growth mode."

Dealer: Debbie Crispin vice president and general manager, Bill Crispin Chevrolet, Saline, MI.

Volume: 1,400 cars and trucks a year; 39 employees.

Personal: Age 38, "single and married to the job." During off-hours she hikes, whitewater rafts, canoes, climbs, mountain bikes and kayaks in international competitions. She is a graduate of Northwood University in Midland, MI.