CARSTAR CEO Says Recession is Opportunity to Strengthen Business - BodyShop Business

CARSTAR CEO Says Recession is Opportunity to Strengthen Business

In his opening address to the CARSTAR Annual Conference in Denver, Colo., Monday morning, Chairman and CEO Dick Cross told nearly 300 franchisees to keep their resolve strong and to focus on their businesses to ensure long-term growth and success once the recession has passed.

"Yes, we are enduring better than anyone else through a very tough test of strength, a test of character and a test of will," Cross said. "But it is this test of will – our ability to think of ourselves with the spirit of a nation – that will drive us through this recession to emerge as the standard for all others to follow – and that’s our greatest blessing and, at the same time, our greatest opportunity."

Cross also attempted to put a positive spin on the current economic situation and the impact it’s having on the collision repair industry.

"The things that are going on today are a blessing because in every instance, they are things that we, the nation of CARSTAR, are prepared and equipped to deal with better than any other collision repair organization in the world," Cross said. "And by dealing with them as we are, we will take a quantum step forward in the history and in the significance of our businesses."

Cross noted that many CARSTAR shops have seen growth during the past year, with 37 percent reporting year-over-year top line growth, compared to 16 percent of shops in the industry overall. Same-store sales have dropped an average of 5 percent in the past year, compared to 15 to 25 percent drops seen industry-wide.

Although Cross said he’s optimistic that the economy will improve over the long run, he told franchisees to run their businesses as if today’s conditions are permanent. In the end, Cross added, simple rules of thumb can help franchisees build their businesses.

"Be extraordinarily nicer to the customers who already bring their cars to our doors," he said. "By living to the fullest our ‘Relax, we’ll take it from here’ pledge of allegiance, we could improve our closing rations by 10 percent, and in most cases double our profits."

Cross also noted that the recession is driving and accelerating new vehicle technologies and predicted its eventual impact on repairers.

"Within four to five years, these changes will obsolete roughly half of the current population of collision repair operators," he said. "while we don’t yet think that these lower tier shops will actually go away, we do believe that those who don’t have the resources or the interest to upgrade their methods for working on new technology cars will become insignificant factors in 80 percent of the industry."

"But this reduction won’t mean automatically more business for everyone else," he added. "Only those who have the wherewithal to adjust their business models in some very significant ways over the coming 12 to 36 months will see any lasting benefit from the end of the recession."

The CARSTAR National Conference is hosting nearly 200 stores at its annual event.

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