Editor's note: An earlier version of this story misstated Maroone's board affiliations.
Mike Maroone, former COO of AutoNation Inc., spent the bulk of his two-year retirement searching for a way back into auto retail. He found it at an off-the-radar meeting last November.
On May 15, Maroone, 63, closed on the purchase of a majority stake in four dealerships in Colorado Springs, Colo., from Serra Automotive Inc.
“It’s a unique opportunity for me,” Maroone told Automotive News. “I was so blessed to have a dad who was a great retailer. This is a way to transfer my knowledge to another generation” of the family.
Combined, the four stores sell about 6,500 new and used vehicles a year, said Joe Serra, president of the Grand Blanc, Mich., group. Serra, 57, still holds a minority stake in the stores but said, “Mike’s the captain of the ship. Mike’s had some exposure and experienced things I have not, and I want to learn from that. Hopefully, I can benefit him and his organization as well.”
Maroone and Serra met 30 years ago when they were second-generation Chevrolet dealers in the same 20 Group. “I had Al Serra Chevrolet in Grand Blanc, and he had a store in Florida, and we went head-to-head,” recalled Serra. “It was a lot of fun.”
Maroone was one of the nation’s largest Chevrolet and Oldsmobile dealers and operated top-performing Dodge, Jeep, Ford and Isuzu franchises during a 23-year career before selling his family business to AutoNation in 1997.
Serra said he and Maroone had developed the idea for Driver’s Mart, a chain of used-car superstores, in 1997. Then Maroone joined AutoNation.
Today, Serra Automotive has 32 dealerships across Michigan, Indiana, Illinois, Ohio, Tennessee, New Jersey and Colorado. It ranks No. 20 on Automotive News’ list of the top 150 dealership groups based in the U.S., with retail sales of 31,133 new vehicles in 2016.
Serra is one of 12 owners of large, privately held dealership groups who get together regularly, said Maroone. “They were kind enough to invite me to join the group even though I didn’t have a store,” Maroone said.
During a meeting of the group in November in Denver, Maroone and Serra got to talking.
“I told him I was looking to get back in retail, and he told me his longtime partner was about to retire,” Maroone said.
Serra and Maroone said they agreed to a price and other terms for the four stores fairly quickly.
The stores in the transaction were formerly known as Front Range Honda, Al Serra Chevrolet North, Al Serra Chevrolet South and Al Serra Volkswagen. They are being renamed Mike Maroone Honda, Mike Maroone Chevrolet North, Mike Maroone Chevrolet South and Mike Maroone Volkswagen.
Maroone estimated they will generate annual revenue of about $200 million.
Maroone has ties to Colorado. He has owned a home in Aspen for about 20 years, and he graduated from the University of Colorado in 1975.
He is an investor in about 20 nonautomotive businesses from restaurants to real estate.
He sits on four corporate boards, including Carvana Co.’s. He also is one of two retailers on Cox Automotive’s board of advisors.
Over the past year, he and his nephew John Hoctor, 43, a former executive with auto auction giant ADESA, have hunted for dealerships to buy. “We’ve looked at many, many deals, and he’s been critical to me,” Maroone said.
Hoctor will work with Maroone running the four stores. Maroone’s other nephew, Alex Damoorgian, 29, and son-in-law, William Knowles, 26, also will work at the stores.
Serra said his decision to sell fits his strategic growth plan. “It was a good opportunity,” Serra said. “It gives me some capital to keep growing.”
Serra said he plans to acquire two more franchises in Michigan in a deal that should close in early August.
Maroone said he will oversee the Colorado business, finance it and mentor his team, but he will not run day-to-day operations. He will orchestrate more acquisitions.
“We will be buying other stores, but I’m not trying to be a big consolidator. I’d like to be a regional player,” Maroone said.
“My goal is not to come out and own 10, 20 or 30 stores. My goal is to transfer the knowledge I have to these young people and make them successful.”