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Business Observer Friday, May 16, 2014 4 years ago

Slam Dunk

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Celebrity Auto Group has gone from less than $500,000 in annual sales to more than $20 million in four years. Secrecy is an integral part of the business model.
by: Mark Gordon Managing Editor

Conor Delaney redefined product placement success soon after he co-founded a high-end car dealership in Sarasota in 2006.

Delaney, who had just launched Celebrity Auto Group, sought to get his firm's name in front of a super-select clientele: NBA stars. A friend introduced Delaney to a music video director. The director agreed to display the firm's name on a license plate in a video for a few seconds in exchange for use of the cars. The arrangement was a big-time success.

“People still see those videos now and say they saw our cars, all these years later,” says Delaney, a London-born onetime professional tennis player. “It made the business look 400 times bigger.”

Now the business really is bigger. Sales at the firm, run out of a 24,000-square-foot facility near the Sarasota-Bradenton International Airport, have increased 121% since 2011, from $9.5 million to $21 million in 2013. Amplifying the growth spurt: the business had $334,985 in sales in 2010. The company has six employees, including Larry Leszczynski, the operations director who co-founded the firm with Delaney.

The partners started the business by pooling together about $85,000 from their savings, in addition to some help from investors.

“We really didn't know what we were doing in the beginning,” says Delaney. “But we ended up growing at a fast pace.”

Past product placement, a big step toward fast growth came in 2010, when the firm opened its business to other high-end folks worldwide, not just pro athletes. Now clients include a Nigerian oil tycoon and the California-based son of a Saudi prince. Celebrity Auto Group has shipped cars nationwide and everywhere from Italy to Japan. Prices range from $20,000 to more than $275,000 per vehicle.

The service Celebrity Auto Group provides to these high-end clients is like a standard dealership — with one major twist. The firm searches other dealerships and private sellers across the world for vehicles. It's not beholden to one brand, and Delaney and Leszczynski say they are more than brokers who simply find cars, resell and make a fee.

Their pitch, instead, and what they say makes the firm unique, is a concierge service — not sign and drive. They sell everything from Lamborghinis and Ferraris to Bentleys and Aston Martins. Range Rovers and rare BMWs, too. On an average day, says Leszczynski, the Celebrity Auto Group showroom has $6 million in inventory.

A large component to the company's business model, in addition to rare finds and luxury service, is secrecy. The entrepreneurs say that builds client's confidence. Leszczynski, 44, and Delaney, 33, never publicly name names of clients. Delaney simply says the professional athletes the firm works with are “A-list.” One name that slipped out, in an article in the November issue of Automotive News, is Detroit Pistons All-Star Chauncey Billups. The article adds that at least 100 NBA players have been Celebrity Auto Group clients.

One day-to-day obstacle the company encounters is one similar to just about any other dealership: customer acquisition and retention. Says Leszczynski: “There are plenty of dealers who sell high-end cars.”

Celebrity Auto Group partially addresses that challenge through technology. For example, the firm uses the FaceTime video call feature on iPhones to hold virtual test drives. So a Celebrity Auto Group salesman might drive around Sarasota in a Ferrari, while a passenger holds the phone in the car for a client thousands of miles away to see.

Another challenge befits Celebrity Auto Group's growth rate: The need for more space. The firm, says Leszczynski, is considering leasing or buying space that would be 40,000 or 50,000 square feet, roughly double its current location.

“We are finding the right pace to grow and get bigger,” says Delaney. “Finding that right balance is hard. It's a good problem, but you have to be cognizant of it.”

Revenues
Year Revenue Growth

2011 $9.5 million
2012 $16.2 million 70.5%
2013 $21 million 29.6%

Employees
2011 3
2012 4
2013 5

Source: Celebrity Auto Group

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