Slemons Imports Sale to Las Vegas Firm Completed : Autos: Mercedes-Benz dealership will continue operating in Newport Beach. Nearly all of its employees will keep their jobs.
The sale of venerable Slemons Imports to the Fletcher Jones Management Group of Las Vegas was completed Wednesday, nearly four months after Orange County’s oldest Mercedes-Benz dealership declared bankruptcy.
Fletcher (Ted) Jones Jr., a principal of the 12-dealership Jones chain, will serve as general manager of the new Fletcher Jones Motor Cars--which will continue to do business as Newport Beach’s only Mercedes dealership in the former Slemons facility.
While neither former owner James Slemons II nor former general manager Malcolm McCassey will remain with the dealership, Jones said almost all of the remaining 145 Slemons Imports employees have been retained. He said he hopes to add about 30 people in the sales and service departments in coming months.
McCassey said he will remain with Slemons in his other business endeavors and will serve the Mercedes dealership as a consultant for three months or more during the transition.
Slemons declined Wednesday to comment on the sale. He said through a spokeswoman that he was unsure of his plans. In the past he has said he hoped to move to Hawaii, where he owns a Volvo dealership. Slemons also owns a Jeep-Eagle dealership in San Clemente.
Jones said that while the sale took nearly three months to complete, the final terms were unchanged. In the deal, signed in September, the Jones Group agreed to pay $11.5 million for the assets of Slemons Imports--$2.5 million in cash and $9 million spread over the life of a 10-year note.
In addition, Jones is leasing the dealership facilities from a separate Slemons company, Jim Slemons Investments, for about $100,000 a month. Most of the lease money is being used to repay creditors of the bankrupt Slemons Imports.
Slemons Imports was founded in Santa Ana in 1961 by James Slemons and moved to Newport Beach in the early 1970s. Over the years, Slemons built the dealership into one of the largest auto dealerships in the county.
In 1990, the last year for which figures are available, Slemons Imports sold 1,231 new Mercedes-Benz automobiles for a total of $61.3 million--the fourth highest gross of any Mercedes-Benz dealer in the United States.
Total sales for the year--including parts, service and used cars, hit $110.2 million--ranking Slemons Imports as the nation’s eighth largest car dealer overall, according to Auto Age, a magazine covering the car retailing industry.
Slemons--a flamboyant Newport Beach social figure--placed the dealership into a Chapter 11 bankruptcy on Aug. 9 because of business reverses largely involving investments not directly related to his auto businesses. The biggest problem was a $13-million loss on Slemons’ 1988 investment in a small commuter airline that later failed. Slemons Imports was also hurt by the recession and the federal luxury tax on automobile prices in excess of $30,000--a tax that was applied in the sale of almost every new Mercedes.
In its Chapter 11 petition, the Slemons dealership listed $17 million in assets and $22 million in debts, mainly owed to Tokai Credit Corp. in Pasadena for loans used to purchase cars from Mercedes-Benz of North America.
Because of the bankruptcy, the stock of new cars at Slemons Imports had dwindled to about 20 vehicles by Wednesday, Jones said. He said he is expecting almost 100 new Mercedes-Benz models to be delivered this morning.
Jones, whose wife, Janice Laverty Jones, is mayor of Las Vegas, said he intends to commute to Nevada on weekends for the time being and ultimately split his time between Newport Beach and Las Vegas.
He said, however, that he intends to make the Newport Beach dealership the flagship of the Jones organization.
