Growth During COVID-19
August 17, 2020—Many businesses have pulled back on growth opportunities this summer because of the pandemic, but not GB Auto Service. This summer, GB added a number of new stores, including a July acquisition of 32 stores from Sun Devil Auto Service, and is currently at 167 stores across four states—Arizona, Texas, California and Nevada. Since late 2017, the company has added more than 130 locations, a 450 percent increase in size.
Recently, Frank Kneller, CEO, GB Auto Service, shared with Ratchet+Wrench what this growth means and how it was possible.
What does this expansion mean for your company?
This expansion represents the latest development in our rapid growth strategy targeting markets that we’ve identified as attractive. Growing our company while maintaining a concerted focus on customer service excellence is a high priority.
What do you attribute your massive growth success to?
Greenbriar and I have both believed for many years that the DIFM segment of the aftermarket is a large and growing market with favorable secular trends and cycle-resistant characteristics (given the non-discretionary nature of many of the services). We also feel that great leaders who are supported by the benefits of a larger platform—scale matters in this market—can drive attractive and repeatable store results. As a result, our strategy is to partner with the best teams in the industry and assemble a pool of talent that we feel is unmatched. To this end, we believe we offer an attractive and differentiated exit alternative for many owners looking to both preserve their brand/legacy and know their employees will become part of a larger but supportive and nimble organization.
During COVID-19, it’s impressive you’ve been able to grow. How do you think you were able to do that?
We focused first on ensuring the safety of our employees and our guests, and once that was assured we continued to pursue expansion of our footprint. We have been amazed—but not surprised—at the resilience and dedication of our employees during this challenging time. We believe that the DIFM segment will emerge from this crisis positioned for continued growth, particularly given an increased focus on the utilization of personal vehicles for transportation. While M&A can be unpredictable, we have plans to further expand our footprint over the remainder of 2020 and beyond.
How do the recent acquisitions you’ve made help you better serve customers?
The companies with whom we've partnered have developed strong connections to their local communities over many decades and in most cases, in-store personnel and area leadership remain the same. We’re really investing in these teams and their relationships with customers, and we support them with benefits that our scale can provide including technology, training, and other resources.
What do you look for when making an acquisition?
The combination of large markets with attractive demographics along with pre-existing relationships help to inform our decisions. We have recently focused on in-market or adjacent acquisitions in Texas and greenfields to drive regional density in order to support our field teams more effectively but are not limiting ourselves to specific geographies. Although there is a great deal of cohesion among our current store base, the truth is that we look at a number of factors when determining whether an acquisition is a fit with our overall direction. Without sharing too much of the “secret sauce,” I will say that we absolutely value companies with strong teams and business fundamentals, community ties, and customer service expertise (which by its nature generally leads to a track record of strong financial performance). Geographic location, while certainly a factor, is less important than the business fundamentals.