Power hitter: baseball legend Hank Aaron scores big with his import dealerships.
A quick glance and you'll find Steve Harrell's Lexus of South Atlanta (part of the Harrell Cos., No. 5 on the BE AUTO DEALER 100 list with $286.5 million in sales), Emmanuel Jones' Legacy Ford Mercury Inc. (part of the Legacy Automotive Group, No. 9 on the RE AUTO DEALER 100 list with $172 million in sales), and Ernest Hodge and Anthony March's Heritage Volkswagen of Union City (part of March/Hodge Automotive, No. 2 on the BE AUTO DEALER 100 list with $555.5 million in sales).
But it's the dealership with the three, ivory-tinted canopies and the sweet, black BMW 645 Series that signals you've arrived. At Hank Aaron BMW (part of the Hank Aaron Automotive Group, No. 38 on the BE AUTO DEALER 100 list with $76.7 million in sales) in Union City. Georgia, you can smell it in the air. It's not the aromatic flavor of the coffee or even the new car smell emanating from the 745 LI, X5 3.0, or M3 convertible; it's the inkling that you can get comfortable in this place.
Unlike a typical showroom, where salespeople hover over customers like a wolf in sheep's clothing, client advisers are either out in the field with prospects, showing off the features of the luxury cars, or dutifully handling paperwork as smooth jazz plays in the background. There's no boisterous paging system, and the parts and service area is as clean as the showroom itself--not one drip of oil on the terra cotta tiles. This is what you can expect when forking over $80,000 for a luxury ride.
This kind of well-oiled machine could only be run by Henry "Hammerin' Hank" Aaron Sr., a man whose life is defined by hard-fought victories--both in sports and in business. On April 8, 1974, Aaron broke Babe Ruth's career record when he hit his 715th home ran, but the pursuit brought hate mail and death threats. It was a time of racial inequality in Major League Base ball, which had few or no blacks in front-office jobs. But even that didn't stop Aaron.
With 54.6% revenue growth last year, Aaron has successfully made the transition from sports legend to business star, and built a BMW dealership from the ground up that now ranks in the top 50% in sales for BMW of North America L.L.C. Known as a humble man who takes pride in providing African Americans with leadership opportunities throughout his companies, we salute Hank Aaron as the 2004 BE Auto Dealer of the Year.
For all of his success on the field, Aaron, recognized early on that there was life at the end of baseball "I knew I couldn't play baseball for 40 or 50 years, so I always had my eye on the bigger picture," he says. For him, that meant becoming an entrepreneur. "I believed if I could just get into something and keep it growing, I could do well. That's when I looked at myself land said I was a businessman."
FIELD OF DREAMS
Aaron's road from the baseball diamond to entrepreneurship is a long one. Having played for the Indianapolis Clowns in the Negro Leagues, the Atlanta Braves, and the Milwaukee Brewers. the baseball legend retired from the sport in 1976, with 755 career home runs. He also established 12 other major league career records, including most games, at-bats, total bases, and runs batted in.
After retirement, it was Aaron's long-standing relationship with the Braves that fueled his new dream: entrepreneurship. Aaron quickly became the highest-ranking African American in professional baseball. Ted Turner, the Braves' owner, appointed Aaron to run the organization's six-team farm system. Aaron went on to become a member of the Braves' board of directors and vice president of player development for the club.
From the boardroom, Aaron moved into the business arena. The friendship he developed with Frank Belatti an executive with Arby's at the time, spawned his entry into the fast food business. Aaron bought his first Arby's franchise in Milwaukee. "Frank Belatti has been extremely fathering to me," Aaron said in a prior interview. "I tell all athletes to make valuable contacts when you're playing baseball. In this situation, the people I made contact with eventually came back to me to get into business." He eventually bought seven Arby's stores and sold them in 1994. A short time later, Aaron would hunger for more.
A BRAND NEW GAME
When the BMW dealership first opened in December 1999, Aaron's name was used to introduce the dealership to a new market of BMW loyalists via advertising on local television. It also helps that. Aaron has an on site office, which gives customers an opportunity to meet him. The impact is phenomenal. On the day of our visit, a little old man in tattered pinstripes wondered aloud, "Is it him? Is it him? He's not as big as I thought."
Aaron invested $5.5 million in startup capital for real estate, the physical building, fixtures, and furnishings. He managed to get his dealership to thrive despite breaking ground in a new area with no prior client base or sales performance. "The minute you are awarded a dealership of this caliber, it'll probably be worth three times as much money as you make out of it now," he says. Despite Aaron's success, it's been difficult for blacks trying to break into the dealership game.
A few years prior, the Washington, D.C. based National Association of Minority Automobile Dealers began pressuring automobile manufacturers, particularly the imports, to create more opportunities for minorities to become dealers. "Hank Aaron0 really benefited from a wave of relationships we had established early on with BMW to increase minority dealer ownership," says Sheila Vaden-Williams, the association's president.
To date, BMW has 340 dealerships, nine of which are African American-owned. Though black dealers represent a scant 2.64% of that total, Vaden-Williams sees progress: "At the interim, we are happy with the 5% or 6% representation [of blacks at the import luxury dealers] ... but until we see true parity, we'll never be happy."
An astute businessman, Aaron doesn't take a penny out of his businesses until they see a profit and prefers to use the funds to pay down debt. He projects the auto group will be debt-free in the next five to seven years. He also oversees all of his operations daily. That goes a long way with the customers. "The reputation that he's built in terms of ethics and baseball says a lot: we recognize that if he were not hands-on in the business or involved in local community activities, business would suffer," explains Jim Gerow, general manager of Hank Aaron Honda and Hank Aaron Toyota-Scion in Griffin, Georgia.
With that mind-set, Aaron set out to diversify his holdings in the car business. About two years ago, Aaron added the MINI Cooper franchise to the BMW dealership; in 2003, he purchased the Honda/Toyota dealership. He is also building a Jaguar/Land Rover dealership that is scheduled to open in August.
The strategy for the Honda/Toyota dealership is a bit different from BMW, mostly because they eater to a different demographic. Whereas the BMW customer in Union City makes $100,000 per year on average, has a college degree, and lives in an affluent suburb, the Honda/Toyota consumer in Griffin caters to a blue-collar consumer. Therefore, the dealership is very involved in the community, including advertising at all of the little league parks around Griffin. That advertising paid for uniforms and equipment.
On the luxury side, BMW corporate has a goal for its dealers to up their units sold to 300,000 annually, equaling a 16% goal increase for Hank Aaron BMW. But Aaron's people aren't worried. "We want to grow the business to 1,000 new cars annually; we can reach this goal in 18 to 24 months," says Sidney Barton, general manager of Hank Aaron BMW, "In 2003, we sold 549 cars, We'll sell 700 at year's end," According to J.D. Power & Associates, imports represented 39.9%, or $6.6 million of 2003 new-vehicle sales with luxury models representing 11.2%, or $1.9 million, of that figure.
So what's the secret to Aaron's success? "The biggest attribute is leadership," explains Barton about his boss. "Pie has always been a winner ... his whole objective is, 'Why do we have to be the smallest dealership in the Atlanta area? We're gonna be the best and the largest.'" To grow the company flora a single store into a mega-enterprise, the strategy is twofold: marketing and customer service.
Having the Hank Aaron name is a big advantage. In fact, it was essential to being awarded the BMW dealership. "I wanted to know ills fingerprint would be on it," says Philip A. Capossela, vice president, Southern Region, for BMW of North America L.L.C. "He really did live up to it. It's very competitive in the car business to make sure you give the best service. One of the things [Aaron] did was go out and hire great car people." When he tapped Barron to run the dealership in 1999, he knew he made the right decision. "You couldn't ask for a more hardworking, honest guy," says Aaron about his general manager, who had 12 years of experience in auto sales before the appointment.
Hank Aaron BMW is growing its business by focusing on customer service. It consistently tries to beat the customer satisfaction index--a benchmark set by BMW corporate. Since inception, Hank Aaron BMW has exceeded the goal with a year-to-date return of 95.2% in sales and service. For 2003, it received $1 million. To keep its ratings high, the dealership has added service programs like Airport Signature Service. Hank Aaron BMW utilizes off-site airport parking. It has shuttles that take customers to their gate, and their vehicles are cleaned and serviced the day before their flight returns,
Today, Aaron's legend endures, as witnessed on April 8, 2004--the 30th anniversary of Aaron breaking Babe Ruth's home run record. One after another, his former secretary, the cop that protected him during his famous home run chase, and numerous colleagues stopped by his office facing Turner Field to congratulate him on his big night, dubbed Hank Aaron Night. "He's part of the DNA of the team," says Terence McGuirk, chairman and president of the Atlanta Braves. "My response for anyone who asks is that I want him to be a member of the Atlanta Braves executive staff forever." McGuirk recalls the hundreds of thousands of hours he and Aaron spent together as members of the board of Turner Broadcasting System Inc. poring over legal documents during a tumultuous time in 1995 when Time Warner was considering purchasing Turner Broadcasting.
Just two years after selling the Arby's stores, Belatti--now CEO of AFC Enterprises, the flagship company of the Church's and Popeye's chains--offered Aaron the opportunity to go back into the franchise business. On Jan. 1, 1996, Aaron opened two Church's restaurants and has since grown the business (housed under 755 Restaurant Corp.) to 19 restaurants, including 13 Church's, five Popeye's, and one Krispy Kreme franchise, with sales growing from $1.4 million to a projected $17 million. All of the locations are based in Georgia, except for two Church's locations in North Carolina and one site in South Carolina,
Aaron still takes a hands-on approach to the fast food business, instilling a simple, effective strategy for growth: good customer service, a great management team, and, at all times, a focus on cleanliness. "His main thing is cleanliness--his pet peeve. It's helped me [see] that you can walk into a restaurant and find 10,000 things to focus on, so we make it an issue," says Victor Haydel, president of 755 Restaurant Corp. and son-in-law of Aaron. They even hired an in-house inspection/compliance person to review quality control issues such as service quality, temperature of products, and preparation.
There is also a customer comment number posted in every store as well as a mystery shopping program where "hired shoppers" go in and grade the experience. It's that type of attention to detail that makes Aaron successful with every new business entity. To add to the auto and food service empires, Aaron also owns 755 Real Estate Corp., a holding company for all of the properties of his companies.
For other black athletes, Aaron drives home the point that you have to do more with your millions besides spend them. "I was fortunate enough to play well beyond the years when people say that you're finished, but not too many people can do that," says Aaron, who retired from baseball at 42. "When you reach a certain age, most star athletes will notice they are starting to [go] backward, and you have to prepare yourself by looking at someone who is not in that same picture with you, not playing sports." Early on, Aaron patterned himself and his approach to business after Joseph Black, a former executive at Greyhound Transportation Co. "Joe was not. a token," says Aaron. "He was there making decisions, and I would talk to him for a long time [about how he made business decisions]." Colleagues see that tenacity in Aaron. "He approaches business the same way he approached baseball," says Allan Tanenbaum, general counsel for AFC Enterprises, as well as adviser and former attorney for Aaron. "He studies and understands the environment around him and the people that impact his business, and then he goes about his business with a quiet elegance."
OPPORTUNITY TO GROW
As he begins to enjoy his twilight years, playing with his grandchildren at his retreat house in Florida, Aaron realizes that he has to slow down, although it may not be in the near future. "I could easily get two or three more dealerships, but I don't see myself, at my age, getting too deeply involved in more businesses."
What he does envision, however, is helping younger folks with the opportunity to break into business as managers, directors, and owners. He's been talking with a couple of black athletes about getting into the dealership game; his sons Larry (a Cull time talent scout for the Braves who works at the BMW dealership in the off-season) and Hank Jr. (who does detail work at Honda/Toyota and is beginning to sell), and his grandson Reynal (a college student who does administrative work at BMW), all work at the dealerships, but they are very much still learning the business he says. "They are on the ground floor level; they wash cars, check cars in, etc.," Aaron says. "You can't just give them a multimillion-dollar business. Running this [automobile] business is like playing [chess,] every move is a little bit different."
Despite his accomplishments in sports and business, Aaron maintains that what he's done is nothing special. He would rather be remembered as a great man than a great baseball player. For die-hard fans, the distinction might be a bit much, but for most, us, it is clear that Aaron is more than a player. more than a businessman. He's a reflection of who we'd all like to be when we grow up.
HANK AARON AUTOMOTIVE GROUP FOUNDED 1999 ** SALES * STAFF 2000 $32.85 48 2001 $40.24 55 2002 $49.61 60 2003 $76.68 111 * IN MILLIONS OF DOLLARS. AS OF DEC. 31, 2003. PREPARED BY B.E. RESEARCH. ** THE COMPANY STARTED OPERATING IN 2000. DESPITE ITS DECEMBER 1999 START. Note: Table made from bar graph.
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|Title Annotation:||B.E. Auto Dealer Of The Year; black enterprise|
|Author:||Sykes, Tanisha A.|
|Date:||Jun 1, 2004|
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