2016: How scary was buying the Luxury Collection? Walser brothers explain
Paul Walser has gone from having “a lot of sleepless nights” after buying Wichita’s Luxury Collection of car dealerships to now outperforming his expectations.
“Certainly, the first two years were worse than I expected, and that was entirely my fault,” he says. “I just underestimated the amount of effort it would take to . . . redo something in another state.”
Walser and his brother, Andrew, own the Minnesota-based Walser Automotive Group and purchased the Luxury Collection near 13th and Greenwich in September 2016. That included Acura, Audi, BMW, Jaguar, Land Rover, Lexus, Mini, Porsche and Mercedes-Benz dealerships.
“You go in another state, and you’re starting over,” Walser says.
There are new vendors and new connections to make in a new state, not to mention learning new brands.
“I just didn’t realize how much it would take to change things,” Walser says. “That was hard.”
He says sales figures and employee numbers tell the story of how far the company has come in almost three years.
In 2015, the Luxury Collection had $95 million in sales, Walser says.
He says that number was skewed by a couple of things. Service and parts pricing was much higher then due to a contract the Luxury Collection had, he says, and about 50 cars that hadn’t sold were marked as sold so the company could qualify for certain incentives.
In 2017 — the first full year under Walser — the campus had $100 million in revenue, including service, parts and all vehicles.
Walser says the company is on track to do more than $250 million this year.
He says there are now 17 consecutive months that each has been the company’s best-ever month.
“The trajectory on this campus is quite a bit more spectacular than even Minneapolis,” Walser says.
“It’s really encouraging to see, and that’s bucking the industry trend.”
At the time of the purchase, the company had 150 employees. Now, it’s at 190.
Walser says there’s still a possibility for more because of how business is growing.
There were 25 sales people, including one female, on the campus when the Walsers purchased it.
Now, there are 36 sales people, 10 of whom are women.
“We have, in fact, targeted women,” Paul Walser says.
He says he thinks part of the attraction for saleswomen is the “far-less-confrontational environment” Walser has because of how it compensates sales employees.
Instead of a traditional sales commission environment, the dealership has salaried sales positions with commission bonuses that are based in part on customer service surveys.
Initially, there was a lot of turnover, which Walser says is common when a new owner takes over.
“The team has stabilized,” he says. “It’s very, very stable there.”
This year, the company is on track to sell just over 4,000 cars, which is an 85 percent increase from 2016 and a 101 percent increase from 2015.
The trend so far this year shows that new vehicles will account for 1,436 of the more than 4,000 total vehicles, which is just under 36 percent.
Used vehicles account for the rest.
Like every dealership nationally, Walser says the biggest challenge for the company is hiring technicians at each of the dealerships.
“That’s really a serious shortage in the whole industry.”
Other than that, Walser says the challenges the company has faced have all worked out.
For instance, early on he wanted to sell the Porsche and combined Jaguar-Land Rover dealerships.
Walser says he couldn’t see the low number of vehicles sold at each dealership justifying their individual buildings, but as things got better, he says he realized the dealerships were a draw to the campus. Particularly Porsche.
“It’s kind of a nichy, cultlike franchise,” he says. “It’s different from almost anything else.”
Walser says he’s come to realize how much each of the dealerships complement each other.
“I wouldn’t sell anything off at any price at this point because they really all fit together.”