B.E. 100s Prowling Into the New Millennium - Stephens Automotive Group, African American-owned automobile dealership

Black Enterprise, June, 2001 by Lloyd Gite

First black-owned Jaguar dealership breaks new ground

AS YOU ENTER THROUGH THE GLASS DOORS AT STEPHENS AUTOMOTIVE GROUP'S MILLENNIUM Motor Cars in Plano, Texas, a brand new 2001 silver Jaguar that sells for just under $70,000 draws you in. Just past the luxury car is a sun-filled foyer where a large wooden table sits with an arrangement of fresh flowers on it. The flower arrangement of roses, lilies, and orchids stands at least four feet tall. The marble floor sparkles like a diamond. The dark wood, huge columns, and pieces of finely upholstered furniture make you feel like you're in the home of a multimillionaire. Then you see the red convertible Jaguar and then the black one and then the silver one. You are now in the lap of luxury--or at least where you can buy one of the world's most luxurious cars, the Jaguar.

In strolls David Stephens. He is dressed in a tailor-made light gray suit. His French-cuff shirt is beige and he is sporting a necktie he bought on a recent trip to Europe, where he visits annually for the Jaguar dealers' meeting.

In May 1999, Stephens beat almost 100 applicants and became Jaguar's first African American dealer in the United States. With $500,000, he renovated a former Jaguar dealership, which had been empty for about six years. The dealership was having money and management problems and was forced to close its doors.

Millennium had an amazing first full year in business. Millennium sold more than 1,000 cars and had sales of $48 million. Its holding company, Stephens Automotive Group, is No. 45 on the BE AUTO DEALER 100 list with $62.3 million in sales. The dealership went from no standing to the top 15% of all Jaguar dealers in sales in North America.

Ford Motor Co., which owns Jaguar, gave Stephens a $1 million loan to open Millennium Motors. Usually it takes five to seven years for a dealer to pay back the manufacturer's loan, but Stephens repaid Ford in five months and now owns the business himself.

"Under Ford's buyout formula, our initial profits exceeded our expectations, so I took those profits and paid off the loan," explains Stephens. "David set a record when he paid that loan off in just five months," says Mike O'Driscoll, president of Jaguar, North America. "The five-month payoff time is not only a Jaguar record, but also a Ford record because only one other dealer in the company's financing history has ever achieved it. He is a real asset to the Jaguar family. He's the kind of dealer we look for. He has a lot of experience and he stands as an example for other dealers."

THE FIRST OF NINE LIVES

Stephens, the eldest of nine children, grew up on a farm in Washington, Louisiana. His parents owned a small farm where they grew cotton, potatoes, and corn and raised cattle and horses. His father was also a minister and part-time school bus driver. But Stephens wanted to do something different. "I had always been intrigued with the car business," remembers Stephens. "I knew people who sold computers and were stockbrokers. I didn't know anybody in the car business."

Three years after Stephens received a degree in marketing from Southern University in Baton Rouge, Louisiana, he joined Ford. In October 1977, Stephens packed his bags and headed to Atlanta, where he worked in field operations at Ford. Over the next 13 years, Stephens held a number of management-level jobs with the automaker including zone manager, fleet and leasing manager, franchising and merchandising manager, and distribution manager. Then he decided he wanted a change. He wanted to become a dealer.

"There was a glass ceiling. Black males just weren't advancing much beyond the level I was at in the regional office," says Stephens, who had complained about a lack of promotions, but without an M.B.A. or an Ivy League school education, moving up didn't seem promising. "Having worked with and called on hundreds of dealers, I had seen all types. Some good. Some bad. I thought with the skill set I had, I could be successful as an auto dealer."

Just before formally finishing the two-year dealer-training program, he got an offer to work for a Lincoln-Mercury dealership in Texas City, Texas, as general manager in June 1992. The owner was in poor health and Stephens viewed it as the opportunity of a lifetime. While there, Stephens ran the day-to-day operations of the dealership, oversaw other managers, and was responsible for the profitability of the dealership.

In May 1993, Stephens opened Falls Lincoln-Mercury in Wichita Falls, Texas. It was an existing dealership that Stephens says was losing thousands of dollars a month. "When I took it over, it was lousy," remembers Stephens. "It was in a horrible location and the facility was mediocre."

Stephens went into the dealership with about $100,000, mostly from his savings. The first six to eight months were very difficult. Finally, in the last quarter of 1993, the dealership began making money. A year and a half later, Stephens went to Ford and convinced them to support his bid to move to a new location. With about $2 million in financial backing from Ford, Stephens moved his Lincoln-Mercury dealership to a more prosperous community within Wichita Falls in 1996. A year later, Stephens says his dealership had about $20 million in sales.