Lookers
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Lookers is a car dealership chain in the United Kingdom and Ireland with over 90 dealerships turning over in excess of £1bn annually.
History
The Lookers Group was founded in 1908 by John Looker. It was based in Manchester and dealt with the sale of bicycles, parts, accessories and the occasional used car. In 1910 the business joined forces with a garage owner in Hardman Street in the centre of Manchester to create Lookers Ltd. Until the First World War Lookers Ltd was primarily a Ford dealer which thrived to such an extent that in 1911 the garage in Hardman Street had to be completely rebuilt to accommodate the business generated by the popular Ford cars. The business was appointed a distributor of Austin motor vehicles in 1918 and continued to grow throughout Lancashire and Cheshire through the acquisition of a number of garages. Lookers and Austin became very closely associated such that the slogan ‘Lookers is Austin’ lasted for many years. In 1929 John Looker retired. The business continued to prosper until the war came again in 1939 when the Austin factory was committed to the war effort and there were hard times throughout the country.
Large dealers had originally operated as Distributorships, and as well as supplying cars to their own retail customers, they supplied cars to retail dealers in their designated area. In return for supplying these cars to other franchised dealers wholesale commission was paid by the manufacturers; however, there was a gradual change to a single network with fewer outlets and in order to replace earnings from wholesaling a stronger emphasis had to be placed upon retailing. The first major acquisition occurred in the 1960s when the Group moved into Yorkshire.
In 1973 the Group’s headquarters were transferred from Hardman Street to Chester Road, where they remain to this day, and the Company became a listed Company on the London Stock Exchange. Issuing shares on the stock exchange created extra funds which then enabled the Company to take its first major steps towards expansion. This has continued to the present day...
Lookers plc is now one of the United Kingdom's top five new and used car dealers. It 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 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 auto- motive 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.
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 "supermarket" 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.
References
"British Car Dealer Widens Its Business Base," Daily Mail, August 22, 2004.
"Car Company Buys Bristol Trade Centre," Bristol Evening Post, February 17, 2005.
Cranage, John, "Lookers Paints Rosy Picture for Year Ahead," Birmingham Post, March 22, 2005, p. 15.
"Hurst Acquisition Drive Gears up in Scotland," News Letter, February 6, 2003, p. 21.
"Looking Good: Car Dealer Confident over Star City Move," Birmingham Post, March 10, 2004, p. 20.
McDonough, Tony, "Car Dealer Buys Rivals for £1.5m," Daily Post, October 6, 2004, p. 6.
McGurk, Helen, "Car Dealer Gears for Growth," News Letter, October 17, 2003, p. 19.
Urquhart, Lisa, "Lookers Banks on New Models," Financial Times, August 17, 2004, p. 24.
Wagstaff, Ian, "Parts Warehouse Distributor FPS Acquired by Lookers," just-auto.com, July 22, 2004.
Wallop, Henry, "Car Dealership Looks the Part," Daily Telegraph, March 22, 2005.
Reg Vardy
In January 2006, Lookers offered 875p per share for larger rival Reg Vardy. However, Pendragon PLC offered a counter bid of 900p a share, which succeeded after Lookers decided it could not raise its bid.
Pendragon Group
During the bidding battle for Reg Vardy, Pendragon offered 1.15 new Pendragon shares for each existing Lookers share. Pendragon went hostile in its all-share bid for Lookers, after Lookers Board refused to unanimously recommend the offer. In April 2006, Pendragon failed in its bid to buy Lookers, after just 21% of Lookers shareholders accepted Pendragons offer.
Subsidiary companies
- Charles Hurst Ltd
- Taggarts Ltd
- Dutton Forshaw Motor Group
- Platts Harris
- Ferraris Piston Service
- Lomond Audi Group
- Shields Automotive Limited
