On entering the serviced business centre in Glasgow that is home to his company’s headquarters, it’s easy to spot Peter Vardy’s office. His clearly labelled door – like those of his PA, finance officer and many others – faces directly onto the public atrium where the auto retailing group’s 95 head office staff mingle during lunch and breaks.
It’s meant to encourage a mindset where “anybody can talk to anybody”, and Vardy is dressed identically to the rest of his staff, with black shoes and trousers to match the corporate button-down shirt that bears the logo with his name over the left breast pocket.
“There is no kind of arrogance or hierarchy in the company,” he says. “We all wear the same uniform, from the office through to sales and maintenance.”
This month marks the tenth anniversary since Vardy opened his first dealership in Perth after his father, Sir Peter Vardy, sold the Reg Vardy motor group to Pendragon for £506 million. Since striking out on his own, the younger Vardy has adhered to the ethos of having fun, looking after his employees and giving back to the community, which appears to be yielding results.
Figures for the full year of 2015 are due to be released soon, and will show a “substantial” increase on the pre-tax profit of £6.5m posted in 2014. Vardy says momentum has carried through into the current year, despite difficult trading conditions in Aberdeen, where low oil prices are weighing heavy, and a more general disquiet recently across the broader market.
“Definitely over the last two months, all the political noise has affected people’s confidence to spend again – Brexit, will your house be worth more or less than it was before, all of that,” Vardy says. “That has certainly affected new car sales.”
So how is Vardy overcoming this? “We are better,” he says, without a hint of arrogance but simply the assuredness of a man who believes that doing the right thing is also good for business.
Unlike most car dealerships, Peter Vardy is closed on a Sunday, but not in deference to its founder’s Christian faith. The decision to go to six days a week was in response to a staff survey that raised concerns about work-life balance, and on making the switch seven years ago, car sales increased.
The company has a flexible work policy and recently Vardy set up a staff share scheme to hand over as much as 5 per cent of the equity in the next five years.
Vardy says happy and motivated staff are key to success in the modern market, where so much information about trade-in values and financing options are now available online. These days, dealers must rely more than ever on providing excellent service. “Everything is much more transparent now, and there are less cowboys out there,” Vardy says. “Now you actually have to do a good job. We have always tried to do that, so perhaps things are swinging our way.”
The group employs about 800 people in total across three divisions, with its network of 12 franchises representing Vauxhall, Jaguar, Land Rover, Porsche, BMW and Mini generating the majority of turnover and revenues.
The CarStore used auto supermarket in Glasgow is also trading well, with a second to open in Dundee in January. The latter will bring with it an additional 70 to 100 new jobs.
By 2021 – the end of the group’s current five-year plan – Vardy hopes to have a total of 20 franchises and five supermarkets through a programme of controlled expansion. “We are trying to make sure we are growing within our ability,” he says. “There is no point in buying ten dealerships if you have to borrow too much and become over-geared.”
But potentially the most explosive growth will come later this year with the launch of new online businesses that Vardy believes could double the size of the group in five years.
Many of the details are still under wraps, but the first will be an online car financing platform that will go live in August.
The second venture is scheduled to launch in February. Neither will operate under the Peter Vardy brand. They will fall under the remit of the group’s newly appointed managing director for financial services, Niral Patel. The August project will be supported by a £2m marketing budget in its first year, a major investment in the context of the entire group’s current marketing budget of £3.5m.
It’s a big risk with substantial reward potential, but Vardy knows the market better than most.
His family’s home in Durham backed onto the forecourt of the single dealership that Sir Peter Vardy inherited from his father, Reg, upon the latter’s death in 1976. Sir Peter went on to expand the operation to about 100 dealerships throughout the UK before selling to Pendragon in 2006.
Along the way, young Peter worked in every part of the business during his summer breaks from boarding school at Loretto on the outskirts of Edinburgh. His first job was dispensing petrol at the age of 14, followed by stints in various departments ranging from parts to finance.
He got his first full-time job in the family business at the age of 21 after completing a degree in marketing and human resources at Strathclyde University. By the time Reg Vardy was sold, he was general manager of the group’s Jaguar dealership in Edinburgh.
The young Vardy quickly set up on his own thereafter, choosing to be based out of Scotland because that was where many of his business contacts were located. “Also, if I had gone with the north-east of England, it would have kind of just been replicating my dad’s business,” he says.
Vardy’s first dealership opened in Perth in June 2006, and though keen to do some things differently he has clearly followed in his father’s footsteps on other fronts. The most obvious example is the Peter Vardy Charitable Fund, which receives 10 per cent of the trading group’s annual profits for distribution to a variety of good causes, similar to his father’s Vardy Foundation, which received a windfall of £45m on the sale to Pendragon.
Vardy also routinely taps up his father for general business advice. “I’ll ring him every day – have done for the last ten years,” he says. “I might say to him that I’m thinking about doing this, or I have done that, just to see what his opinion is. I don’t have much of an ego, so I have no problem saying I’ve got something wrong, or I need help with something.”
But Vardy also has his own take on the world, which has been partly shaped by his participation for the past 14 years in the Global Leadership Summit run by the Willow Creek Association in Chicago. Originally developed to help church leaders sharpen their skills, speakers have included a large range of high-profile names from a variety of fields such as Bono, Carly Fiorina, Colin Powell and Condoleezza Rice.
“I wouldn’t miss it,” says Vardy, who has taken groups of staff from his company to the annual event in August. “Everything moves so fast these days, you have got to try and make some time to develop your leadership skills.
“Probably the most important thing I have learned from it is that when a leader gets better, everybody wins. If you can upskill all the leaders in an organisation, then it can grow.”