Fifty-nine year old Garry, one of the driving forces behind the rise and rise of the Autobarn stores, said his main business principle is simple: “You are better off making an incorrect decision than no decision; better off being wrong and working out what to do, than not doing anything.”
On September 1, 1977, he purchased two Brians Speed Shops; at 310 High St, Northcote, and 857 Sydney Rd, Brunswick.
“By coincidence, I was one of first Autopro dealers,” he said. “The stores just multiplied after that.”
When he started out in retail he was confronted by another automotive retailer in the same road, George Kallinikos. Garry opened seven days a week, but on Sunday mornings he had difficulty opening the doors and often had to call in a locksmith.
“George used to put superglue in my locks every Sunday,” Garry laughed.
Between 1977 and 1985 our Dynamic Auto businesses grew and he also had stores at Niddrie, Prahran, Highpoint and Doncaster.
In 1985, nine like-minded business owners, led by Amos Bush of Horseless Carriage fame, met at the Pathfinder Motor Inn on the corner of Cotham and Burke Roads, Kew, Victoria. The intention of bringing together successful specialist automotive parts and accessory retailers to consolidate the purchasing and marketing of their businesses under a group banner.
The reasoning was simple: all in attendance were concerned with where the automotive aftermarket was progressing. The business owners felt threatened by the advances made by competitors, including mass merchants, hardware stores and service stations, and the possible impact on each business going forward.
After some fiery debate, it was agreed that a group known as Autobarn would be formed with the nine business owners being the shareholders. Each shareholder contributed $3000 as start-up funding. This seed capital was the only cash ever put up by the shareholders.
Founding shareholders were Amos Bush, Peter Mitchell, Jim McNiven, Martin James, Grahame Sheedy, Garry Dumbrell, Matt Grindlay, Paul Gould and Peter Fox. It was a prerequisite that all shareholders be store owners.
Garry said the name Autobarn was agreed by all as the least disliked of a number of proposals. The initial structure was in the form of a cooperative known as ASPAR Cooperative, (Automotive Spare Parts and Accessory Retailers).
In August 1985, the Autobarn brand was launched at a small office in Thornbury, and Victoria run by Amos Bush, the cooperative chairman and manager George Kallinikos, with the nine shareholders and 11 stores in the stable covering the Melbourne metropolitan area and several regional centres throughout Victoria.
Over the next five years, larger offices were required. The administration moved from Thornbury to Heidelberg and then to Elizabeth St Melbourne.
In 1986, George Kallinikos and Martin Coyne acquired shares in the cooperative and hence became shareholders. George had formed a business relationship with Garry Dumbrell, and Martin Coyne had acquired the Wonthaggi store after a partnership split with Jim McNiven.
“In the formative years, it was a battle to convince the nine head-strong business owners to de brand from their original trading name and take on the sole Autobarn signage on their buildings,” Garry said.
“All stores were initially co-branded. It wasn’t until 1989 that all stores were complete with sole Autobarn livery.”
The overriding culture of the group from day one was that if the members were successful and profitable, the brand would also be successful and grow. The Autobarn cooperative grew to 28 stores by 1990.
Garry said that in the growth process, Autobarn developed a unique and successful approach to the retailing of automotive parts and accessories by being attuned to changes in the marketplace.
“The growth in consumer demand for service was recognised at an early stage. Autobarn designed and developed a new retail environment to specifically cater for this emerging market,” he said.
Garry Dumbrell and George Kallinikos acquired the Dynamic Auto Accessory Group from the McEwans Hardware chain (Ariadne), which swelled members significantly. Other members joined through the original vision of the founding members.
“At a conference on Hamilton Island in 1989, as part of the program, all members reviewed the accredited supplier stock range, line by line, store by store in hard copy,” he said.
“There were five substantial books that put the Encyclopaedia Britannica to shame. It was a tedious exercise at best.
“We argued for three hours if we should all stock three tow balls, and 10 minutes on how we would spend the next years advertising budget of $300k.”
Garry said that after this conference, Amos suggested we look at a radical new business structure called franchising.
In 1991, the cooperative merged into a franchise based system to become Autobarn Pty Ltd. It was a bold move as the franchising sector was in its infancy in Australia at this time. This vehicle was chosen as a way forward for the group.
“It gave us the avenue for growth by not being dependent on acquiring existing businesses to swell the ranks,” Garry explained. “This platform enabled Autobarn to be able to market a franchise business to a wider and diverse base of potential business owners without capital input from the shareholders.”
To ensure the success of the enterprise under a franchising regime, Garry said Autobarn adopted a number of principles that it had followed as a cooperative to ensure the systems effectiveness:
- established, clearly defined territories that cannot be changed without a franchise agreement, and board approval;
- all shareholder and director owned stores must become franchise stores. This was to ensure that decisions made by the board would be adhered to and carried out by the directors and shareholders. This ensured that no onerous or unfair decisions would ever be proposed or enacted by the board.
In 1991, the group agreed to implement a software program for all stores. “This program gave us the ability to update and maintain our accredited supplier stock file,” Garry said.
“We offered stores a system whereby all cost, RRP and product ranges were overseen by Autobarn and distributed to stores electronically. This eliminated the need for individual stores to maintain pricing etcetera, while at the same time ensured product sourcing from the supplier program was maximised.”
In 1992, the head office was relocated to Doncaster. This new office comprised administration, finance, advertising and marketing and product planning and a fledgling IT function. Amos Bush assumed the role of managing director and chairman, George Kallinkos was the finance director with Paul Gould the product manager.
In 1992, the first new franchise store was opened in Springvale, Victoria with a new franchisee. Although this first store proved to be unsuccessful, Autobarn learned from this first foray into franchising and proceeded to instigate systems and procedures that would stand the brand in good stead for years to come.
Autobarn initiated a strict four-week training program for all new franchisees to ensure they entered their new store with the best possible grounding in operational procedures.
“We even went to the degree at Nunawading of setting up an in-house concept store to train face to face sales, merchandising and IT skills,” Garry said.
It was always Autobarn’s stated aim to prove that franchising is the best system for small business in our environment.
“Autobarn’s approach to franchising and to achieve pre-eminence in this sector was based on the knowledge that its own success was closely linked to the success of its franchisees, and was to be the underlying principle of the Autobarn culture,” Garry said
In 1994, Peter Fox was offered the position of franchise services manager at Autobarn. This new position was required due to the growth of new franchised stores within the group, and to give franchisees a higher level of service to ensure success of the franchisee and the brand.
In 1995, Autobarn was one of the first systems to instigate a Franchisee Advisory Committee. The idea behind this controversial initiative was to give franchisees a voice in operational and marketing aspects of the brand. From its inception, this process became a successful staple of the group, although strategic direction was held firmly by the Autobarn board and shareholders.
In 1996, George Kallinikos had attained the level of general manager, but decided to relocate his family to the Gold Coast in Queensland where he purchased an established Automotive parts and accessory store in Bundall. George proceeded to convert this to an Autobarn franchise. He was also appointed to the role of National Property and Franchising Manager. Due to George’s sea-change, Peter Fox was offered the role of General Manager, a position he held until 2002.
Garry said that at this time, Autobarn was in negotiations with Bruce Peters, head of the Bumpa-T-Bumpa chain, with the intention of purchasing his franchise network. Over the coming months, a deal was struck whereby Autobarn would purchase the franchisor assets including its franchise agreements. The stores then converted to Autobarn stores, swelling the ranks by 29 stores located in Queensland, NSW, ACT, SA and NT
During 1997, Autobarn was again innovative and proceeded to develop a first for the automotive aftermarket sector, a website that initially highlighted brand and franchising opportunities.
In 2001, Autobarn was presented with an opportunity to purchase the Haigh Australia warehouse in Scoresby, a Melbourne suburb. The Haigh board was keen to relocate their operation to Queensland, but did not wish to transport their entire stock range nor default on a long-term lease they held on the existing building. Autobarn jumped at the chance as this enabled them to sell product to its store network direct, and hence retain profits within the organisation.
Amos Bush retired from the organisation in June 2002 after 16 successful years that oversaw many watershed moments for the brand. Peter Fox assumed the role of CEO with the departure of Amos, who still retained his shareholding.
In the years between 1991 and 2005, Autobarn Pty Ltd has been one of the most decorated franchise systems in Australia. Winning the Franchise Council of Australia National Franchisor of the year on four occasions, Best Homegrown Franchise System, and numerous National and State Franchisee of the Year Awards. Numerous AAAA Industry Awards and five Catalogue of the Year Awards as voted by the Australian Catalogue Association. Autobarn was a regular top 500 companies in the fastest growing category of the BRW Magazine. The group was recognised by its peers as a best-practice business model, and operated in the top 5 per cent of all franchise systems in Australia.
Garry said that from 1996, Autobarn produced detailed business and strategy plans on an annual basis to ensure the business was kept on the path of success. The plans were reviewed on a monthly basis with all department heads, which ensured a common direction for the business.
In April 2005, Autobarn relocated its warehouse in Scoresby and administration function in Doncaster to an 8000 sq.m complex at Terracotta Drive in Nunawading. With 2005 sales growth exceeding $180m, and servicing now required for 93 franchised stores spread throughout all states of Australia (except WA), it was deemed necessary to consolidate the administration and logistics operations under one roof.
The services provided to the network by Autobarn comprised national administration, finance, advertising and marketing, product planning, procurement and distribution, sales and field services, franchise training facilities and a state of the art IT department which supported the IT function of the company and all Autobarn stores.
In September 2006, two of the founding shareholders, Garry and Paul Dumbrell, and Danny Wallis, CEO of the publicly listed company DWS, put forward an offer to purchase the shares of the remaining shareholders. This was subsequently accepted and Garry entered the business as Managing Director.
“This transition was deemed a necessity for the group as a whole by the shareholders as it injected much needed capital into the organisation, which could then fund the next growth phase,” Garry said.
However, business wasn’t all smooth sailing. Garry explained that a 2008 meeting at major supplier, National Parts, didn’t go well.
“We wanted extra rebates, and they wanted to take rebates off us,” Garry said. “As George and I were leaving we said, ‘boy if these guys ever run into trouble were in trouble because we’ve got no other source other than these guys.’
“Unknown to us they (National Parts) were in financial jeopardy, and within six months they went into liquidation. They owned the Autopro name, which is the trade name; Autobarn is the retail name. We had to buy that (Autopro) name.
“We bid on the business, but our bid was not the highest,” he said. “Repco’s was the highest bid. We found out at 5:05 p.m. on a Friday. We were in strife because Repco’s bought it and they don’t like us; We’ve got no product.
“On the Monday, the liquidator rang and said for whatever reason Repco were not going through with the deal, so they offered to accept our bid, which was only for the stock.
“Then we had to bid for the name Autopro because the stock was worthless without the name. Not knowing how much anyone was going to bid for the name, we bid $1.1m for a piece of paper and won the name Autopro.
“I believe there were a couple of other bidders, but we had to gazump everyone because we had $5m worth of stock, purchased at a discount price.”
Garry said the suppliers were then in a quandary because we knew National Parts purchase price for buying because we had their records. Some suppliers didn’t want to break that chain, having an intermediary between the importer and retailer.
“Several suppliers stood back and wouldn’t deal with us. We had to convince those people to deal with us. And we had to fund the acquisition of $5m worth of stock and more or our stores would have gone out of business as the only place they could have bought stock from was Repco.
“We knew the buy prices; we knew the rebates, and it was much more difficult than we thought. We had to change from a retailer doing the odd bit of importing to a full-bore wholesaler with 40 or 50 guys in the warehouse, and doing a $1m a month turnover.
“In some cases, our turnover was $1m a week. Our best day was $500,000 and we were doing about $50m a year.”
Garry said it was a learning curve, and wasn’t always easy with the weight of responsibility: “We had the whole gantry of becoming a wholesaler of major proportions with some 80 or 90 stores relying on us getting this right,” he said.
“We got through it and then we started opening stores, the store numbers got to 102 or 103, and it was about this time that Paul (son) started with the business, part time in marketing.
The purchase of National Parts and the Autopro name was the catalyst for the big jump in the size of the group, which went from about 90 stores to more than 200, with distribution centres around the country.
In 2010, Garry had a toothache and didn’t feel well. He ended up at Epworth Hospital and was told he had months to live.”
When he returned to his office, and with the death sentence hanging over him, he told his personal assistant of 19 years, Samantha, to clear out his office.
“I gathered the staff (80-90 people) and told them that I wasn’t well and had to take time off,” he said. “And unbeknown to my son Paul, I announced he would be the CEO.”
In 2012, Australian Automotive Brands was sold to Metcash, who then funded more acquisitions to make Automotive Brands grow. The company was then sold to Burson for $300m in 2015.
Paul Dumbrell explained that Autopro is 80 per cent regional stores between 200 and 500sqm in size and three or four staff; Autobarn stores are bigger, up to 1000sq.m and 30 staff, with 60 per cent of these stores metropolitan-based.
As for Garry, he’s still going strong despite the prognostications of medicos.
Interviewed June 2017