UPDATED — October, 21, 2017 — Last month, the Trophy Automotive Group completed the purchase of four dealerships that were part of the eight-store Sage Automotive Group in the Los Angeles, CA area. Trophy, which was started by Nasser Watar in 2014 with the acquisition of Mercedes Benz of Encino, acquired West Covina Nissan, Universal City Nissan, Kia Downtown Los Angeles and Mercedes Benz of Valencia.
The Sage stores were owned by brothers Michael, Joseph and Leonard Sage. The group ran into legal problems last year when the Federal Trade Commission ruled it had engaged in deceptive and unfair sales and financing practices while using deceptive advertising and deceptive online reviews to lure customers. The brothers decided in March of this year to pay a $3.6 million fine to their customers and to settle with the FTC.
We’ll have more on the story in our upcoming Third Quarter Report on Dealership Buy-Sell activity.
It’s the second such collapse this year of a dealer group that has encountered legal problems. Earlier this year, Gary Flom’s eight-store group in New York fell apart after running into problems with Nissan and cost overruns on an expensive facility upgrade in Manhattan. The Nissan stores — one in Mt. Kisco, one in White Plains and the other in Manhattan are now dark. Maserati bought back its franchise while the Jaguar Land Rover store was auctioned last month. The buyer should close on the deal by the end of the month. (We’ll release the name of the buyer once the deal closes. It’s a group located in the Northeast).
UPDATE: Flom’s Chrysler dealership store was acquired by Zachary Schwebel, founder of the Skyline Motor Group, according sources involved in the transaction. Meanwhile, sources say a deal for the Bay Ridge Ford dealership fell through and is back on the market.