25 Stores and Growing, A CEO’s Journey
When Randall Simpson purchased his first quick lube facility in Frederick, Md., he thought that was it.
“We started thinking that was all we were going to do,” he says.
Simpson had worked on cars when he was younger, but it wasn’t his passion. He spent a year in school studying business before he left and ran a tire shop. Then a year later, his mind became set on quick lubes. Simpson loved the business model and simplicity of the customer staying in the car, and within just a half hour they were gone.
That was in 1987.
Now, Simpson is the chief executive officer for WLR Automotive Group and oversees 350 employees across 13 quick lubes known as “The Lube Center”, 10 car washes and two repair shops. The company is valued at $50 million.
Over 34 years, Simpson has worked at almost every spot in the shop through periods of slow growth and fast expanding times. He’s worked with a partner and been on his own. His company has survived several stock market crashes, recessions and now COVID-19. And he’s ready to guide his company through future challenges that he anticipates will shift his business model significantly.
Conservative Start, Aggressive Finish
For the business’ first 25 years, Simpson worked hand in hand with partner Steven Ranney. The pair bought the first quick lube together and expanded together. But in 2012, Simpson bought out Ranney, who was getting close to retirement.
That’s the first time Simpson took a step back from the day-to-day operations. From there, Simpson took on the title of CEO and formed a corporate office, hired a chief financial officer and established managing partners.
“The way I run the business is 100 percent different than I did 25 years ago,” he says.
Since Simpson took full control, he has replaced a “conservative” approach to expansion, which his former partner emphasized. He’s now leading a much more aggressive approach in growing the company.
WLR has added 10 locations in the nine-year period since the buyout. And while the expansion has been rapid in pace, the strategy has been controlled and calculated. In acquiring the last 15 facilities, Simpson estimates he looked at 300 sites.
All 25 locations are within an 80-mile radius around the Washington DC and Baltimore area. That radius is key to the business’ success, Simpson says. With a corporate headquarters in Frederick, Md., and a team of maintenance workers, the locations need to be easily accessible.
Simpson’s style is to go to an area, build a few car washes and then put in a quick lube within five miles of the car washes. Then build out and “dominate” the market from there, he says. In Frederick, Md., a city of 70,000, WLR has three car washes, three quick lubes and a repair shop. He prefers that strategy instead of a cross-country approach which sees a few shops in many states around the country.
Simpson’s aggressive style continued throughout COVID, adding two stores despite the company shutting down for an extended period. Simpson will continue to expand the business, although that expansion will be heavily invested car washes space moving forward.
Navigating the past and the COVID present.
While the business is doing well now, it hasn’t always thrived. It’s gone through its ups and downs, starting during the first week at the first location.
That’s because four days after Simpson opened the first quick lube in 1987, the stock market crashed. It was a rude awakening to the business world. Simpson anticipated that on the shop’s first day, they’d service 100 cars. They did 12. Two weeks after opening, Simpson’s staff went from 22 employees to seven. With lowered expectations and lower expenses, the shop was able to rebound. But it wasn't Simpson's only challenge.
The company’s biggest project, a $10 million facility that was a combination of all its offering, quick lube, car wash and repair, was being constructed throughout the financial crisis in 2008 and 2009. The banks walked on Simpson and his partner and they had to come up with the last $4 million themselves.
“That experience in 2008 and 2009 was a big factor in how I handled COVID,” Simpson says.
While most businesses were forced to shut down when COVID hit, quick lubes weren’t. But Simpson shut down anyway.
Along with the obvious safety concerns, Simpson didn’t feel the company would be able to sustain the losses, especially with the amount of overhead the company had. Prior to the pandemic, WLR employed more than 30 corporate employees.
Simpson also knew if he stayed open that landlords and banks would expect full payments. Closing everything meant that the company’s payment of rent and outstanding loans would be delayed 90 days. He also knew that landlords would be more willing to work with them if the business was closed.
So the company shut down for two months and reopened in the middle of May. June proved to be a solid month and then July was the best month the company’s ever had.
“That saved our company. Had I not closed for two months, we’d have bled to death,” he says.
But even with the company’s operations shut down, Simpson continued to expand, opening two more locations.
Despite the addition of two new locations, Simpson has reduced his employee count from 370 to 350 companywide. Simpson believes the organization became too top heavy. With success in previous years, they began to hire people that ended up not being efficient. In an effort to become “leaner,” the corporate payroll was cut by 20 percent.
Shifting away from quick lubes.
For the last 15 years, Simpson has been reading about the impending doom that quick lubes will face as electric vehicles rise in prominence. It has yet to come.
But Simpson’s view on it is beginning to change as he’s watched a multitude of manufacturers announce pledges to fully transition their fleets to EVs. He’s the first one to admit it’s “a tough subject,” but believes it’s a necessary discussion.
“I’m very surprised at the way the industry is preparing for it, because I haven’t heard much about it,” he says. “We should be listening.”
As a result, Simpson says WLR will likely close two or three quick lubes in the next 10 years. He’s also looking for a buyer to acquire the rest of the company’s quick lube operations down the road.
Simpson will focus all of its expansion efforts into the car wash part of the business. He hopes to build 15 to 20 express car washes in the next five years. That’s where the next evolution of his company will be.
Despite Simpson’s efforts to distance the company from the quick lube space, he still sees opportunity and upside in the business. There will be attrition, Simpson says, but there will still be plenty of cars that will need an oil change. Service and convenience will be key. If you can meet that you’ll survive.
“It’s still as fun today as it was 30 years ago,” he says.