Reed/Jones Acquisition LLC
Jonesing for a Hawaii Mercedes-Benz Operation
More Mainland big boys are in town, this time in the luxury automobile market. Reed/Jones Acquisition LLC, a partnership between auto dealers Fletcher “Ted” Jones Jr. of Las Vegas and Gene Reed Jr. of South Carolina, makes its debut on the Hawaii Business Top 250 list this year in the No. 34 spot, with $192.9 million in 2004 gross sales.
Reed/Jones purchased six car dealerships and a body shop, including Mercedes-Benz, Jaguar and Land Rover of Honolulu, Porsche of Hawaii and two Big Island Honda dealerships from Jardine Hawaii Motor Holdings Ltd. The sale closed at the end of 2003, so Reed/Jones’ 2004 sales performance represents a 9.8 percent increase over the $175.7 million in 2003 gross sales, which Jardine reported a year ago.
Jones’ late father, Fletcher Jones Sr., started his first dealership in Southern California in 1950. By 2002, the Fletcher Jones Group had expanded operations to Las Vegas and Chicago, and Ted Jones had become the No. 1 privately held Mercedes-Benz retailer in North America. He wanted to acquire more successful Mercedes-Benz organizations and, in 2003, Mercedes let him know that Jardine Matheson was interested in selling its group. Jones says he was well aware that Hawaii was an attractive auto market and called his friend of more than 20 years, Gene Reed, to form Reed/Jones Acquisition.
Jones says that his Fletcher Jones Group had a great 2004, with just under $1.5 billion in combined sales, making it the 14th largest dealer group in the country. The performance of the Hawaii operations for that year was, in his opinion, excellent. “We’re very pleased so far and think the potential is there to do better and better,” says Jones.
His son, Fletcher Jones III, who moved to Hawaii from Jones’ Chicago dealership at the end of 2003 to help close the deal and become the general manager for Mercedes-Benz of Honolulu, adds, “We’re more than pleased with our business out here. It’s more than we could have ever expected. We were able to come in and we did our best to keep 100 percent of the employees and there are really talented people here who made the transition so easy.”
Hawaii Automobile Dealers Association president and Servco Pacific Inc. president Eric Fukunaga says, “In terms of bigger players coming in, I think it raises the standard and allows everyone to really step up to a higher standard and I think it’s good for competition and for the customer.” Servco, a diversified company that includes Lexus, Toyota and Chevrolet dealerships, hit the Top 250’s No. 11 spot, with $577.2 million in 2004 gross sales.
Reed/Jones is certainly planning to step things up. A Maui Mercedes-Benz dealership is in the works, as well as expansion plans for the Honda dealership in Kona. Fletcher Jones III is projecting $209 million in 2005 gross sales, an 8.7 percent increase. He says more support staff, inventory and lending-institution partnerships, better service department operations and more aggressive advertising should all contribute.
Says Jones: “We’re ecstatic to be here in Hawaii. It’s been a great first year and we look forward to being here for a long, long time.”