By Alysha Webb
Steve Lamb is a life-long car guy. The owner of Crystal Automotive Group in Homosassa, Florida worked in his dad’s Chevrolet dealership when he was growing up, and Lamb became a car dealer, too. But Lamb is now keen on another type of dealership, as well – Harley-Davidson.
“I have several friends who have sold car stores and bought a Harley store. I didn’t pay attention. Then the Harley guy approached us. We bought a store, it was really good,” Lamb tells Automotive Buy Sell Report.
Lamb recently sold his Nissan dealership to David Maus, and used the proceeds to pay off one of his two Harley stores. It doesn’t mean Lamb won’t continue to be a car guy. He owns a handful of other car dealerships. But Lamb finds a lot to like as a Harley franchise owner.
The profit margins, for starters.
“A well-run Harley store does 10 percent sales to net,” says Lamb. “Three to four sales to net [is normal] for a good car store.”
In the beginning, that was hard for Lamb to believe. After the first month of owning the Homosassa Harley store, his long-time controller sent Lamb the results. The margins were so large he thought she had made an error. Lamb called her and she answered the phone by saying, “No I did not screw up.”
Then there’s the service lane. Customers who come in to have their Harleys worked on “want to hug you,” says Lamb. “They bring their cars in, it is the opposite.”
Steve Lamb with his wife Jewel
Lamb and his wife are Harley riders themselves. They like to wear Harley clothes and sport other Harley-brand items. That’s characteristic of many Harley owners, it turns out. The dealerships sells Harley clothes and accessories, which range from picture frames and coffee mugs to door mats and piggy banks.
“We bought a clothing store that happens to sell motorcycles,” says Lamb. “We sold over $100,000 in clothes at one Harley store.”
The clothes are not the big money makers, though. Selling motorcycles is. It takes more work to sell the clothes and the margins aren’t as good. “But you have to do it because it is part of the experience,” he says.
Complicated real estate maneuvers
Lamb’s Harley stores are located in Homosassa and Ocala, Florida. He took over the Homosassa store in January of 2015 and the Ocala store in November of 2015.
Nissan’s strategy of rewarding multiple franchises in one area to a single owner are behind Lamb’s ability to pay off his Homosassa Harley store. The auto manufacturer wanted to develop a cluster of Nissan stores along highway U.S. 19 in Florida.
David Maus already owned a Nissan dealership on U.S. 19 in Pt. Richey. The manufacturer suggested Maus buy Lamb’s Homosassa Nissan dealership, and it would also award Maus an open point in Spring Hill, Florida, on the same highway, says Lamb.
The deal took about six month to complete, says Lamb, and did not include the Homosassa Nissan dealership’s real estate.
That’s because Lamb wants to move his Homosassa Harley dealership to the location of the Nissan store on U.S. 19 so all his franchises will be grouped together.
So, Maus acquired the building that Lamb’s Homosassa Harley dealership is currently in, located a mile away on U.S. 19. He will tear down the Harley store, turn it into a parking lot, and build a new Nissan facility behind that spot, says Lamb.
Meanwhile, Lamb will renovate the Nissan dealership to become a Harley store. The process should take about a year.
Lamb also owns two Chrysler Dodge Jeep Ram stores, a motor sports store, a buy-here-pay-here store, and a truck center. He doesn’t own any luxury brands. “We are in Citrus County,” says Lamb. “This is a retirement area, not a high income area.”
He likes working with Chrysler Dodge Jeep Ram manufacturer FCA, says Lamb. “I am one of those dealers that just loves the factory and doesn’t have any complaints,” he says.
Lamb also like working with Harley- Davidson, but the motorcycle manufacturer is a stickler for some things, such as pricing. If the gross margin falls 17 percent on a new motorcycle’s price, “you are going to hear from the factory,” says Lamb.
Also, he is not allowed to advertise any kind of sale or discount off his property. “I have never run an ad without sending it to (Harley) for approval,” says Lamb.
Lamb isn’t looking to acquire more dealerships of any kind. He and his wife Jewel would like to have more time to ride their Harleys.
Their 28-year old son is very engaged in the company, says Lamb. “If he wants to grow it, good for him.”
