Thames Valley 250 spotlight
- TV 250 No 12: Ridgeway Group
- Founded: 1997 by David Newman
- Head office: Newbury Motor Park, Berkshire
- Current sales: £444 million annual sales; 1,010 staff; 24 sites
Ridgeway: Driving growth with care and precision
Today, Ridgeway is ranked among the Top 20 UK large motor retail groups. Its 15-year story is one of continual growth and expansion from just two small dealerships to an influential UK automotive industry player
Ridgeway Group chairman David Newman and CEO John O’Hanlon are happy men. They have just completed major new franchise deals that mean they have achieved their business dream in just 15-years.
“It’s three five-year plans really, because I don’t believe anyone can see beyond 3-5 years in today’s fast-changing world,” says O’Hanlon.
It’s also an impressively rapid rise – from that Volkswagen dealership in Wantage to become winner of the Motor Trader ‘UK Dealer Group of the Year Award’ 2012 – bearing in mind there was a recessionary ‘blip’ in the middle, writes John Burbedge.
Those deals last month bring the acclaimed Land Rover and Jaguar marques into the Ridgeway portfolio – already packed with major consumer and commercial brands from Audi to VW, BMW to Mercedes, MINI to Skoda.
“These are the final pieces within our premium quality jigsaw and our aim to develop a leading UK motor group.
“Originally, we wanted to sell great brands in a concentrated local area and grow to a £75m-100m turnover within five years, but we became aware that we had a level of desire, drive and capability that would allow us to do much more.”
Within a year of its first 1999 acquisition (Jewson Skoda, Oxford) business grew by 50% and this year the Ridgeway Group – now offering new, used and fleet sales, financing, repairs, parts and servicing – is set to turnover £550m.
“Our growth has been steady and well-timed rather than spectacular. We want to grow well, not just because the opportunity is there.”
Targeting a future with prestige German brands was a deliberate strategy. “In the 1990s they were niche UK players rather than today’s volume sellers, and it’s taken a lot of hard work, planning and relationship building to achieve our long-term objectives.”
The franchised brand portfolio was created alongside Ridgeway’s experienced senior management team, selected from within the company and the best available external talent. (In 1998, Newman personally recruited O’Hanlon, then a Grant Thornton automotive specialist.)
“I saw David as someone with the desire and integrity to do things the right way, and could see the premium motor sector set to develop rapidly.”
It did, and Ridgeway did too with steady growth and M&A activity, financed from bank debt and retained earnings.
Ridgeway’s major industry move forward was in 2007 when it purchased the Pentagon Group, adding Mercedes-Benz, AMG and smart brands, and fresh geographic locations in the Solent region. “Effectively, we doubled our size,” said O’Hanlon.
And the recession? O’Hanlon admits that Ridgeway “took on massive financial gearing just before the banking world came to and end in 2008, which has kept our minds focused.”
“But we’d had 10 good years, always paid down our debt, and built up our strength. When the recession hit we had Plans A, B and C in place. We actually had a great recession, never went beyond Plan A.”
Since then, low interest rates, consumer flight to quality, ‘green’ motoring and strong brand marketing have all assisted the Ridgeway success story.
O’Hanlon has no pretensions about the group. “We are just a number of shops with great brandnames above the door. We sell products and can’t afford to forget the simple rules of retailing – looking after customers, staff and the P&L. We also have tight margins and quite high overheads, so we have to maximise every opportunity we get to sell products.”
Not an easy task with Internet comparison reducing showroom footfall of increasingly price-aware customers. Ridgeway is facing the challenge head on with an in-house team ensuring appropriate topical communication. “The key point is to engage with Internet-enabled communication and maintain interaction.
“There are two sides to a great motor retail business: a high level of business performance and then taking advantage of your scale. If we achieve that in our shops then we hit our sweetspot.
“The driving of long-term performance comes from having a suitable budget, processes and policies, but also engaged staff producing high customer satisfaction.”
Plainly, Ridgeway has also satisfied the performance requirements of major manufacturers, met says O’Hanlon by “focus on detail, a fun team culture where achievement is recognised, and investment in the best managers available to lead our progress.
“Our USP is that a customer walking through our door becomes part of the Ridgeway family and can depend on our support.
“People buy from people, relationship building is vitally important, internally as well. It’s wrong for people to be led by company dictat or memo. Ridgeway is not a company, it’s a cause.
“Our challenge now is take Ridgeway from being very good to great. When you’ve got the tools in the cabinet that we have got, it would be a crime not to take advantage of them.”