(Re)born to Be Wild
The roof leaked, the financials were sketchy, the employees were unmotivated, and the customers were disgruntled--so Mike Schwartz decided to buy the place. Now his Harley-Davidson business is a $53 million-a-year phenomenon.
Andrew Hetherington
Gone in 60 Seconds When Mike Schwartz took over, his Harley dealership was moving just 153 bikes a year. Now it sells 1,700 annually.
Andrew Hetherington
Before Schwartz cleaned up the dealership and moved it into its new home (above), the place was barely surviving, living off the iconic Harley name. "It was kind of a club," says another Harley dealer
Andrew Hetherington
Easy Rider Schwartz (here with a 2006 VRSCR Street Rod) know his demographic. He is his demographic.
Spend a few hours at Mike's Famous Harley-Davidson dealership in New Castle, Del., and chances are you will witness someone's moment of consummate joy. You'll be wandering around the massive warehouselike building, constructed in the late 1990s with reclaimed brick, pine floors, and antique factory fittings. You might be running your hand along the gleaming fuel tank of a Sportster when you'll hear the clanging of a bell. Mike's salespeople, mainly clean-shaven and dressed in chambray shirts and blue jeans, will whoop and give each other high-fives; the mechanics will lay down their wrenches for a moment; and browsing customers will applaud and grin broadly and maybe dream about the day the bell will ring for them. Someone has just bought a Harley, and the good vibes reverberate like a revving Fat Boy.
At Mike's Famous, this scene is now repeated more than 1,700 times a year at multiple locations, producing some $53 million a year in revenue and making it one of the largest Harley dealers in the world. And that makes CEO Mike Schwartz very happy--especially since he remembers what his business looked like 11 years ago. When Schwartz acquired the dealership in 1994, it was a 29-year-old $1.8 million business, selling 153 bikes a year and losing money. It was surviving, barely, on the iconic Harley name. So Schwartz set out to reinvent the company, transforming it into a tourist attraction, professionalizing the management team, scrapping programs that didn't work, and expanding those that did. Along the way, he found that it doesn't do much good to try to get your company to grow unless you grow along with it.
"I knew he meant business"
Schwartz's hair is close-cropped, his black-framed glasses are more Mild One than Wild One, and he's pretty proud of his denim shirt with its "Voted #1 Dealer Worldwide" embroidered above the pocket. In other words, Mike Schwartz is your basic Harley guy, circa 2006.
Schwartz grew up in the suburbs of Philadelphia and studied economics at the University of Delaware, which is where he bought his first bike. It was a practical purchase, not a passionate one: He and a roommate cashed in their meal tickets to buy a $1,200 street-legal Kawasaki to get around campus. As a young adult, Schwartz was never a motorcycle enthusiast; he was too busy figuring out how he'd start his own company. He worked at a small restaurant and as a salesman of tanning beds until he built up enough confidence to strike out on his own.
By 1992, when he was 33, he had founded two small and profitable companies: Apple Paging and Communications, which sold cell phones and pagers, and ABC Ticket Co., a sporting events ticket vendor. He had a wife and a son; he was successful, but perhaps a little restless. And that's when he wandered into a Harley dealership. "There was this buzz around Harley," he recalls. "It was the intrigue that brought me there." Suddenly, he had a powerful hankering for a Harley.
Before Schwartz cleaned up the dealership and moved it into its new home, the place was barely surviving, living off the iconic Harley name. "It was kind of a club," says another Harley dealer.
The dealership was situated on Wilmington's Northeast Boulevard, which had been the major traveling route from Philadelphia to Washington, D.C., until the construction of the Interstate 95 corridor in the '50s. Schwartz was told he'd have to wait a year and a half for his $13,000 Heritage Softail cruiser, which was not an excessive lead time at a Harley dealership back then. "Every couple of months, I'd go back there to check on the status of the bike," says Schwartz, who recalls shaking his head every time he returned. "You could tell the business hadn't changed in years." But Schwartz sensed that the place might have potential. Finally, after a year, he got word that his bike had arrived. "He came home from picking up the bike and he told me, 'I'm going to buy that place," recalls his wife, Debbie, who sometimes teaches time management at the dealership. "And knowing Mike, I knew he meant business."
In spring of 1994, he bought the dealership for $325,000. He financed the sale with earnings from his other businesses and with a loan from the former owner. The roof leaked, the financials were sketchy, the employees were unmotivated, and the customers were disgruntled. But it wasn't the business he'd bought that sparked his imagination: It was the business he planned to create.
Famous? Not back then. But the Mike's Famous name was like a gauntlet that Schwartz laid at his own feet; if he didn't live up to his own boast, he knew the name would make a mockery of him. "Mike speaks his life into existence every day," says Otis Hackett, a LaPorte, Ind., sales consultant who specializes in motorcycle dealerships and helped Schwartz figure out how to sell motorcycles. "He says, 'This is what I'm going to do,' and then it happens."
The Mike's Famous name was like a gauntlet that Schwartz laid at his own feet. He knew that if he didn't live up to his own boast, the name would make a mockery of him.
What lay ahead for Schwartz was, in many ways, more difficult than starting from scratch because he had bought a company based on a business model that was becoming irrelevant. "The dealers were mostly developed by a cadre of enthusiasts," explains one Harley dealer. "It was kind of a club, and it wasn't customer-focused. You'd hear stories of customers who rode up on a competing brand of motorcycle and were snubbed."
But by the early 1990s, a new kind of Harley customer had surfaced--a customer who was a lot less likely to put up with that kind of treatment. This customer was in his mid to late thirties, educated, demanding, and sophisticated. If he didn't like the way he was treated when he walked into a dealership, he would not think twice about walking out.
As Schwartz saw it, there was opportunity in the disparity between the old-style Harley dealer and the new breed of Harley customer. He knew the business would always attract the hard-core bikers, but he also wanted the clean-cut baby boomers with unfulfilled dreams or midlife crises--consumers who might be tempted by a ride on the wild side but who might just as easily choose a home theater system or a sailboat. He knew the demographic because he was the demographic.
