Instead of delivering the $100 million in extra profits promised, the strategy overhaul has left the automotive giant in disarray and profits sliding.
Already a subscriber?It was the McKinsey devised program that was meant to deliver $100 million in profits for automotive giant Bapcor by next year. Instead, Better Than Before pushed the ASX-listed group behind the Autobarn, Burson and Midas brands, into disarray.
Paul Dumbrell, the businessman who was to commence as chief executive on May 1, surprised shareholders by announcing he had changed his mindOne person who knows the business better than most is Garry Johnson, a major shareholder. Mr Johnson has spent decades in the automotive parts sector, and was the co-owner of the Burson business which eventually became Bapcor.AdvertisementBapcor, which was known as Burson Group until 2016, listed at $1.82 in 2014.
Mr Dumbrell’s appointment was announced February 1. A former V8 Supercars racing driver, Mr Dumbrell won’t say why he changed his mind, but competitors suggest it was because he discovered the poor state of the Bapcor business. Companies like Repco and other rivals including Supercheap Auto, owned by ASX-listed Super Retail, had taken market share recently, analysis by Jarden found.
In a presentation to investors about the Better Than Before program, the company made a similar claim. Some 90 per cent of revenue was non-discretionary, and immune from the ups and downs of the economic cycle, Bapcor told shareholders. About 80 per cent of revenues at Bapcor come from selling to hundreds of thousands of mechanics and garages. Another 10 per cent, the company said, came from Autobarn but were repeat purchases that customers would not cut back on.
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