Interview: Driven man who is happy to follow in father's tyre tracks

Published on Sunday 26 July 2009 21:19

SMELLS of fresh coffee from the onsite café and the twang of pop band Busted waft through the Peter Vardy BMW dealership in Edinburgh. Gone are the days of oil stains on the carpet and a man in a dodgy tie trying to sell you a used maroon 3-series.

In fact, the only tie in sight is round the neck of Peter Vardy himself, the grandson of the legendary Reg Vardy, and even that, he says, is unusual.

"I'm always trying to picture what the next generation of dealership will look like," says Vardy. "I'm drawing up plans to get rid of the sales desks – people don't want to be bartering with a salesman. The days of transactional selling are over, it's all about the experience now."

The sales "experience" is a key theme for Vardy, 31, who was educated at Loretto, the private school in Musselburgh, and studied marketing at Strathclyde University before joining the family business. He now takes his inspiration not from his competitors but from shops such as the Apple store in Glasgow. He wants touch panel screens on the wall, where customers and staff can look over car specifications together.

He also takes inspiration from the giant supermarket chains, especially when it comes to buying stock, negotiating "aggressive" deals with manufacturers to bulk buy cars from their recession-fuelled stockpiles. "It's not necessarily our buying power but more being 'cute' with your buying," says Vardy.

His strategy seems to be paying off: sales at Vardy's three Vauxhall dealerships – in Motherwell, Perth and Kirkcaldy – are up 35 per cent year on year.

Vardy admits discounting and the UK government's scrappage scheme have played roles in his sales racing ahead. "It's through deals – you wouldn't get anywhere this year if you weren't willing to do a deal," he says.

"I've had some of the cheapest cars in the UK. I've been selling cars to Somerset, Birmingham, Cardiff, Swansea."

Motorists are happy to pay fees of up to 350 to have cars sent down south to them, and Vardy thinks the brisk trade will help his firm grow revenue to 138 million during this year.

He also hopes to return an operating profit of about 3 per cent of turnover – or about 4m – which would be a maiden profit for his three-year-old business.

"We didn't make any money over the past two years, but this year we're starting to see a bit of a turnaround," he explains.

"I'm trying to write down the goodwill I've paid for businesses over five years instead of 20, so my figures haven't looked the strongest in the past two years."

Vardy started out in 2006 by buying the Vauxhall dealership in Perth, before adding sites in Motherwell, Kirkcaldy and Edinburgh, where he runs BMW and Mini franchises.

Accounts filed at Companies House reveal turnover grew from 36.8m in 2007 to 107.6m in 2008 before amortisation of goodwill amounting to 360,000 in 2007 and 810,000 the following year. Such heavy write-downs left Vardy with an operating loss of 368,000 in 2007 and 192,000 in 2008.

While bullish about his plans for expansion, he is more guarded when it comes to specifics, although he reveals he is bidding to buy land to build a new dealership, having already constructed his Kirkcaldy operation from scratch.

In terms of marques, Vardy admits he wants to build on his present successes. "It's much better if you have more of what you've got," he says. "My priority is to have more BMW and Vauxhall dealerships. I'm speaking to them all the time.

"I'd like a standalone used-car operation. There are other brands I admire – like Mercedes and Ford."

Vardy thinks his present head office staff could handle 25 dealerships without the need to take on more expertise, but he stresses he would not exceed 40, on the advice of his father.

But Vardy maintains that, as a Christian, he isn't motivated by money and instead wants to build a "world-class business".

Vauxhall ranks its dealerships using a formula calculated on cars, parts and servicing sales, along with customer and staff satisfaction; Vardy's Motherwell site comes out on top, with Kirkcaldy in second place and Perth in sixth.

"That's something we never managed at Reg Vardy – we never reached the top spot," says Vardy.

"But it vindicates us. The vision was to create a world-class organisation; my dad had probably one of the best in Europe, so my philosophy was, if he had the best in Europe and I'm learning from him, then you can't go back on that, you have to get better."

Much has been written about Vardy's father – Sir Peter – and the three schools he runs in the north of England, under what he terms a "Christian ethos". While Sir Peter has denied being a creationist, that has not stopped him being branded as a "fundamentalist Christian car salesman", a phrase that makes the younger Vardy bristle.

But for a man whose family's religious beliefs have been the subject of so much public scrutiny, he seems more than comfortable to talk about his own faith.

Yesterday, he was playing the drums during morning worship at Findlay Memorial Church in Glasgow and he's previously been heavily involved in running youth clubs. He now wants to set up a course called God At Work, similar to the popular Alpha courses for helping people explore Christianity.

Following a visit in 2001, Vardy is vocal in his support for children in Cambodia who have been trafficked as part of the sex trade and his staff are busy raising money for Swiss charity Hagar International, which works with the youngsters.

And his dream car? Vardy has an immediate answer.

"A Mustang – the car from the film Bullitt," he grins. "That's the car of all cars."

IT'S A FAMILY AFFAIR

REG Vardy set up a haulage business near Durham in 1923 and opened his first car dealership in 1945.

Four years later, he was appointed as a dealer by Ford and steadily grew his business. His son Peter joined the family trade at the age of 16, and his first job was sweeping the forecourts.

Under Peter Vardy – he was knighted in 2001 – the firm grew to 100 showrooms and 6,000 staff, with a turnover of about 1.7 billion a year.

Sir Peter sold Reg Vardy to Pendragon for 506 million in 2006 and stood down as chief executive, with his son, also Peter, leaving his post as manager of the Rossleigh Jaguar Edinburgh franchise.

Father and son then set up Peter Vardy, which runs six car dealerships in Scotland.