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Cadillac dealers, whose store values were below average in the late 1990s, are enjoying a lucrative comeback.

As Cadillac introduced a wave of popular new products over the past five years, the value of a successful metro store has quadrupled.

As a result, many dealers are renovating or building stores. Some dealers want to buy more Cadillac dealerships, but few stores in major metro areas are for sale.

"Volume is up about 35 percent from five years ago," says dealer William Bradshaw of Bradshaw Chevrolet-Buick-Cadillac, a dealership in Greer, S.C., that sells 150 new Cadillacs annually. "With the CTS and Escalade, we're seeing younger customers."

Store values have skyrocketed because sales and profits have increased. Also, Cadillac is perceived as an up-and-coming franchise, so dealership buyers will pay more for "blue sky," the value of a dealership's intangible assets. Blue sky is expressed as a multiple of pre-tax earnings.

In 1999, a typical 400 unit-per-year store posted pre-tax profits of about $500,000 and sold for about two times pre-tax earnings or about $1 million, say store brokers. Today, the same store is posting pre-tax profits of about $1 million and is worth four times pre-tax earnings or $4 million. The figures do not include real estate and other hard assets.

Although the value of Cadillac stores is up, their blue sky can't match that of Lexus dealerships. A solid Lexus dealership can sell for six times pretax earnings, says Sheldon Sandler, founder of Bel Air Partners in Princeton, N.J., an investment banking firm specializing in car dealerships. Most dealerships typically sell for three to five times pretax earnings.

Good times

"Business is good and getting better," says dealer Gary Stanford, of Les Stanford Cadillac in Dearborn, Mich. He just renovated his dealership's exterior and has begun an interior upgrade. He sells about 540 Cadillacs annually.

Dealer Val Ward Jr. of Val Ward Cadillac Inc. in Fort Myers, Fla., just renovated much of his store's interior, including the body shop and offices. He sells about 800 new Cadillacs a year.

"These are the best times I can remember," Ward says. "We're seeing a world of difference in the clientele."

Cadillac is attracting younger buyers - an indication that the brand has a hipper image. This year, the average age of Cadillac buyers is 59, down from 63 in 1999. And the average Escalade ESV buyer is 48.

Bob Goodman this year sold his dealership, Goodman Cadillac-Saab-Kia in Ann Arbor, Mich. He acquired the Cadillac franchise in 1999.

"It seemed like a good time," Goodman says. "The brand was hot, the product was hot. It just made sense."

He declined to reveal the dealership's sales price. Cadillac had a four-car lineup in 1999. Today, it has four cars; a light truck, the Escalade; and a sport wagon, the SRX. Cadillac sold 178,507 vehicles in 1999 and 216,090 in 2003.

Cadillac sticker prices are higher, too. The most expensive Cadillac in 1999, the Seville, started at $44,025. The division has four nameplates that start above $45,000: the Escalade, Seville, DeVille and XLR.

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And here there has been alot of dealers giving up thier franchies due to the rising costs of special tool and training.

They are not 400 cars\year stores mind you but in my area you must travel 350 miles west or 600 miles east to find a Caddy dealer still operating.

P.S. none north or south
 

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the reason the stores are being remodeled isn't because of rising sales and profits, it's because Cadillac understands the value of image, and more or less mandated it. they actually paid for part of the cost, as i understand it. our store looks great, but i couldn't find any images to post. well, just trust me, it's nice, and i've seen others in the area that are pretty good, too..... just not as good as this one!!
 

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The Caddy dealership by me is selling there place. Its one of the top selling Caddy dealerships on the east coast.
 

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It seems that in the last year or so my Cadillac dealer has been carring a LOT more new vehicles in stock. Use to be that he only would keep a few.. ;)
 

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The Caddy dealer closet to me must have had a few good years, they just renovated the entire dealership, exterior and interior.
 

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My favorite Cadillac dealership was recently bought by Penske Automotive Group. The owner walked away with something like $12M in his pocket. Not bad.
 

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The Caddy dealer closet to me must have had a few good years, they just renovated the entire dealership, exterior and interior.
as i said before, Cadillac is paying for part of the remodels of their stores. they want, and need, a new image. some of the stores here before the remodel were no better looking than a Chevy dealership. not good for attracting higher end customers....
 

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Originally posted by SUPERBADD75@Jun 15 2004, 03:18 AM
The Caddy dealer closet to me must have had a few good years, they just renovated the entire dealership, exterior and interior.
as i said before, Cadillac is paying for part of the remodels of their stores. they want, and need, a new image. some of the stores here before the remodel were no better looking than a Chevy dealership. not good for attracting higher end customers....
A few miles away from where I live there is what I consider to be one of the best looking dealerships around. It has hard wood floors, all the furniture is leather, there are sofa's and recliners in the corner, paintings on the walls, etc...It really is very nice without seeming gaudy or contrived.

Oh its a caddy dealer BTW.
 

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Well, today I went inside the Caddy dealership by me. The inside reminded me of a mid-80's show room. Gold vien glass, cheap shag carpet, and the salesman are all in there 70's, and they havent changed there look as well. Guys with horrible fake hair pieces and what reminded me of leasure suits.
I have seen better used car dealerships. The attitude was just the same. No one greeted me at the door, or helped me with my questions.
Now when I went with my gf's parents to the Lexus dealership, that is 2 dealerships over, everything was totaly different. Younger, cleaner looking guys that were really enthusiastic about the cars and helping you. Everything just felt different there.
Kind of disappointed with my visit. :(
 
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