What happens when you’re successful in one industry and think you have what it takes to start fresh in a new one even though you don’t have any experience? What if you think you’ll be able to succeed because you’re an enthusiast of the products you plan to sell, and then you put your life savings into the new effort?
Well, things don’t always go as planned – especially if you’re not willing to delegate responsibility to the experts who work for you.
That’s what happened when Pete Athans, a successful real estate professional, decided to open a car dealership just because he loves classic cars. He invested $4 million into a used car dealership 10 miles outside of Chicago. Still, about $2 million of that investment was used to build what can only be described as an indoor playground. Instead of purchasing cars to sell, Pete spent money on big-screen TVs, video games, high-end luxury finishes, giant murals, and furniture. The bottom line? Pete was losing $1.8 million per year.
The Profit Enters
The Profit Season 2 Episode 1
Marcus Lemonis visited the dealership, and his first thought was, where were all the cars? What he did see in the parking lot were a few high-end luxury vehicles, which probably appealed to Pete, but might not be the right kind of cars for Pete’s potential customers.
Then Marcus walked in and saw the Athans lounge. Pete thought his customers would want to stay awhile and hang out – probably because that’s what appealed to him – but according to Marcus, customers want to get their cars and leave; they don’t want to hang out and play. Lemonis told Pete that the money he had spent on renovations should have been invested in inventory. Pete was $6.9 million in debt and losing $100,000 every month. Marcus let Pete know he had to sell 60 cars per month at a margin of $2,500 per car just to break even. The 20 vehicles on the lot were not moving because they were too expensive. Pete would need to add 100 more vehicles to his inventory, and he would need $1.5 million to purchase them.
Lemonis agreed to give Pete $3.5 million for a 50% stake in the company. But this offer was conditional. Pete would have to get rid of the lounge, liquidate the existing cars, and change the name of the company. Pete wasn’t happy with what he heard, especially the part about changing the name of the business.
When Pete put nearly everything he owned into Athans Motors, it was more than just money he invested. He had put his very soul into the business, and doing away with everything he had built thus far felt like his dream was slipping away. In addition to creating the lounge and stocking his preferred class of vehicles, he was reluctant to hand over any responsibility to the experts who worked for him.
Earlier, Marcus had spoken to Pete’s accountant, Erica, and she admitted that Pete kept all of the financial documents in his office. And Pete’s General Manager – his cousin Tony – confessed that Pete was a micromanager and would not give him the authority to act on his own without supervision. Pete wanted 100% control over his business, but it’s clear his decisions and management style were not working.
It was time to liquidate the existing inventory, and Pete was aggravated when he saw that the cars on the lot were being marked down too low for his liking. He admitted that he didn’t trust his cousin Tony to sell the cars because it wasn’t Tony’s money. Tony finally had had enough and resigned from his position. Pete would have to find a new General Manager – one that was preferably not family and who would have the freedom to make his own decisions.
The makeover continued. Marcus sold off the items in the lounge and replaced them with car accessories instead. A grand re-opening was planned, and a new name was announced: AutoMatch USA. That was too much for Pete, and he stormed off in anger. At that point, he wanted to call off the deal. But Marcus was straightforward with him and let him know that all of these changes were necessary to get the business back on track and become profitable. Pete felt that he was becoming invisible as everything he had put into the dealership was being changed or taken away. Marcus sympathized and told Pete it would be a painful process, but, in the end, the result would be a profitable business. Pete agreed to accept Marcus’s deal.
AutoMatch USA Today
AutoMatch USA brought in $100,000 on the day of the grand re-opening. Within a short time, morale had improved, Pete was micromanaging less, and Marcus hired a new General Manager with over 30 years of industry experience. The average monthly sales were up to 90, and it looked like the business was on its way to profitability.
However, the suburban Chicago dealership closed during the summer of 2016 (Lemonis had opened stores in other parts of the country). In an interview with Lemonis in Forbes Magazine not too long after the grand re-opening, Marcus admitted that he should have encouraged Pete to find a different career. Pete was attracted to the glamour of the industry, and he loved his classic cars, but he just couldn’t commit himself to the work that was required to keep the business healthy. Pete was no longer with the company, Marcus said.
But it seems the business didn’t work out very well for Lemonis, either. In 2018, he sold AutoMatch USA to EchoPark Automotive (and then EchoPark closed all of the Florida locations that same year). If you type AutoMatch’s URL into your browser, it will redirect to EchoPark.
In late 2019, it’s impossible to find any trace of Pete Athans on social media, and Google doesn’t turn up anything but an outdated LinkedIn profile. Hopefully, Pete has learned some valuable lessons from his partnership with Marcus Lemonis and has found a way to intersect his interests with his business skills.
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