Rebounding From A Failed Sale
The news seemed to come out of nowhere. There were no warnings, no signs of struggle, and Bob Dresser had absolutely no clue it was coming.
Just two years into an early, albeit admittedly restless, retirement, Dresser got a phone call from a friend as Dresser and his wife, Mary Beth, returned home to Las Vegas from vacation.
Dresser almost couldn’t believe what his friend was telling him: The two collision shops Dresser had sold some 28 months earlier—shops he’d built, ran and operated successfully for 20-plus years—had closed.
“I didn’t even know what to say; I couldn’t believe it,” he says.
The shops’ new owners had filed for bankruptcy, closed the doors and left town. Dresser was still owed more than $2 million from the sale. And to make matters more complicated, Dresser still owned one of the location’s buildings; he now had an empty facility to worry about.
“Just like that, everything changed,” Dresser says. “Our shops were a goner, but we had to figure out our future. What were we going to do?”
The Dressers first opened up shop in Michigan in 1982, before a desire to head West brought them to Las Vegas. They sold their Michigan shop, and opened CollisionQuest on the east side of Las Vegas in 1994.
Steadily, they built the business. They added a second facility in 2001, and by 2004, the two shops were grossing $6 million annually.
“We had great reputations, we had dealerships referring us work, and we had plenty of insurance work,” Dresser says. “It was a very healthy, successful business.”
It was so successful that the Dressers were getting requests to purchase it. At 46, Dresser hadn’t really considered selling until then, but decided to test the market. He placed ads in industry trade publications, and received an eager inquiry from an ownership group based in Utah.
“They had three successful shops out there, and were trying to get into the Las Vegas market,” Dresser says. “We didn’t have a whole lot of great competition, and they’d already bought a facility in the area with a so-so reputation. They wanted our name and reputation.”
The deal to Dresser seemed too good to pass up. He sold the business in early 2005.
The details of the sale were relatively simple: The Utah group made an initial down payment to Dresser ($500,000), and would pay $25,000 every month until the rest of the sum was paid off. In return, the group took over the business in its entirety—its name, equipment, employees and leases. (Dresser owned one of the two properties, and he elected to retain ownership of that and lease the space to the shop.)
“They never missed a payment—not once; never late or anything,” Dresser says. “I got my last payment at the beginning of August in 2007. I got the phone call that they’d closed on August 20th. I was shocked.”
It turns out, the new owners weren’t exactly running any of their facilities on the “up and up.” They were skimming money from the business, failing to pay vendors and were behind almost $3.5 million in back taxes to the IRS.
Dresser says he’s still unsure if the group was trying to manipulate their financial statements to ensure the sale, or if they had personal issues that led to the theft and deception.
“Or maybe they were just clueless in running their business,” he says. “It doesn’t really matter the reason. Either way, they ran that thing into the ground, and they did it fast.”
As far as Dresser was concerned, CollisionQuest—as a business and a brand—was dead. The bankruptcy would make it impossible to simply reopen the shops and hope to rebuild them.
“The name itself was destroyed,” he says. “They ruined all the relationships we built. They lost all our DRPs, alienated the vendors and dealerships. The name was dead.”
Dresser would pursue the money owed to him through litigation, but he was told it could take years before making any headway. And taking into account the legal fees and the state of the Utah group’s finances, getting the $2 million in full felt like a pipe dream at the time.
Then there was the building he still owned, which made it impossible to sit back and react passively to the situation.
“I had a facility—a nice property—and I could’ve either sold the property to someone, or I could try to lease it to another shop,” he says. “I could also jump right back in there and rebuild the thing myself.”
Retirement never sat well with Dresser.
“I was only two years in, and I was bored,” he says. “I was still young, and I had stopped doing the one thing I’d done all my life. I wasn’t happy about what was going on, or about being forced into it, but I was pretty quick to jump back in.”
Dresser would open a new shop, under a new name, out of his 15,00-square-foot facility. In every way conceivable, the Dressers were starting a business from scratch. And they were eager to purge the building of all remnants or reminders of the past owners.
They tore down signs and cleaned out the shop. They cleaned and reorganized, and meanwhile, Dresser started to reach out to old contacts.
He assured insurers that he was now in control and nothing the Utah group did in that facility would in any way relate to the business’s future. He called area dealerships and explained the situation and how he hoped they could rekindle past business.
And they settled on a new brand, Collision Masters East.
“It was a straightforward name that was simple and said what I wanted us to be about: quality,” Dresser says, noting that “East” refers to their location in the city.
He was able to bring back a majority of his original staff, many of which had either quit at the time of the sale or were laid off when the shops closed.
And slowly, the Dressers built their new business.
The slumping economy in 2008 had a severe impact on the Las Vegas area, but Collision Masters was able to steadily grow.
Using the processes and systems that contributed to his previous success, Dresser was able to use the business’s quality of work as a selling point to insurers and dealers in the area.
The Dressers made the decision to join CARSTAR in March of 2009.
“It was about the marketing we’d get from it, and the ability to give a nationwide warranty,” he says. “It was a pretty simple decision.”
And the shop continued to grow to the point where, in 2012, Dresser bought a new 40,000-square-foot facility in a more central location.
In 2013, Collision Masters CARSTAR East averaged roughly $250,000 in monthly sales through August.
Litigation is ongoing to recover the final $2 million the Utah group owes to Dresser.
Apart from the money he’s still missing, Dresser says he’s more or less satisfied with the way everything has turned out. He loves being back in the industry, and anticipates staying at the helm until “actual retirement age” at which point he will be much more cautious about leaving his business.
“You have to do your due diligence,” he says. “I thought I had, but obviously, that wasn’t the case.
“I was in business for about 25 years when I sold. That’s a long time to build something to have it ruined in two years. The grass isn’t always greener on the other side. I definitely now appreciate what I have and what I’ve built.”