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Auctions America happy with first Auburn results
AUBURN, Ind. – Donnie Gould and his crew learned – first hand – a little Greek mythology in this northern Indiana town during the 60 days preceding Labor Day.

Although the labors of Hercules demanded he clean the foul (and extensive) Aegean stables in a single day, Gould – at times – had to have experienced some kinship with the Greek hero after his company bought the 235-acre Kruse Auction Park.

Gould, the president of the newly created Auctions America, had thrust upon him the unenviable challenge of turning around an event which in recent years had lost its luster.

In its glory days of the 1990s on into the 21st century, Kruse Auction Park’s Labor Day sale was among the most prestigious classic automotive events in the world. Built around the Auburn Cord Duesenberg Festival, the sale was the “crown jewel” of the Dean V. Kruse empire and the small town of Auburn.

Although Dean’s father, Russell, headed up the inaugural sale, it was Dean who had the vision. The sale, at the beginning, was a moderate success. However, in 1979, at a time when the nation first recognized an “energy crisis,” double-digit interest rates and a stagnant economy, much of the life went out of not only the automotive industry, but the Kruse Labor Day sale. Dean would eventually buy out each of his family members.

And, as he envisioned, Dean Kruse - the effusive entrepreneur – soon built the Auburn show into an event for classic car collectors.

And Dean – with the flair of one of his heroes, premier showman P.T. Barnum – adored the limelight. Kruse International became the first company to sell a car for documented $1 million in cash; he broke records in a highly publicized $43 million three-day sellout of casino magnate William F. Harrah’s collection. At Auburn, he sold Greta Garbo’s 1933 J Victoria twice, once in 1972 for $90,000; then in 1990 for $2.8 million.

In print, he was regaled as “The King of the Auctioneers,” and the town of Auburn became “a Mecca for collector car enthusiasts.” For all his efforts, Kruse, a former Indiana State Senator who recently turned 70, was interred into the Indiana Auctioneer Association Hall of Fame.

But, in the end, that fame was relatively fleeting. By 2008, the first cracks in the Kruse empire were showing. Contractors were beginning to complain they had not received pay for work performed at the Kruse Auction Park. Consignors were beginning to file lawsuits, alleging they were not paid money owed to them for sale of cars.

By late 2008, the Indiana Attorney General’s office had received more than 40 complaints, totaling nearly $400,000 allegedly not paid out to consignors.

But, that seemingly was only the tip of the iceberg. Kruse is also subject to several Indiana lawsuits for defaulting on loans. There are complaints generated by auctions – primarily auto sales – from throughout the country, including Pennsylvania, Florida, Arizona, Nevada, Michigan, Massachusetts and South Carolina.

On May 25, Kruse and Kruse International Inc. were stripped of their auction licenses by the Indiana Auctioneer Commission. At the hearing, Kruse told members of the commission that he had released vehicles to trusted customers before receiving full payment. He said he had been stiffed for around $6.7 million.

Kruse publicly blamed the recession.

However, the writing had been on the wall for years. The glory days of fast talk, luxurious cars, and big money changing hands were beginning to pale. And it showed. The white paint on the buildings was thin and peeling. At “Car Corral,” one of the major outdoor sales rings, the interminable dust was reminiscent of Oklahoma in the 1920s; when it rained, the event turned into a classic car “Mud Bog.”

Smaller – but important inconveniences – loomed as well. A sparse setting of port-a-johns produced long walks and frequent cursing.

So, when Rob Myers, a long-time Kruse competitor as the founder of powerhouse RM Auctions, rolled into Kruse Park on July 1 and announced that he was buying Kruse auction park, the real work was on the table. Myers made no bones that he was “re-branding” the event as Auctions America by RM; and that Kruse was to have no “legal or financial” interest in the new venture. Myers, of Canada, made it clear from the beginning that he would have no direct hand in overseeing the new venture. He had enough on his plate, managing an international organization that did more than $200 million in sales.

As the new president of Auctions America, it would be up to Gould to put together all facets of this year’s Labor Day auction, scheduled for Sept. 2-6. He had exactly 60 days to put together a classic car extravaganza, featuring nearly 1,000 desirable autos in, of course, a “newly branded venue.”

“It was pretty run down when we got here,” Gould says.

During the next two months, Gould and his team would paint seven buildings, one of which was 200,000 square feet under roof; repaved 160,000 square feet at the entrance; change all the signage and coat nearly 1 million square feet of asphalt for the parking lot, with a traffic pattern designed for easy entry and egress.

Despite spending nearly $1.5 million in upgrades and renovations at the park, it was not an easy cut-and-dried endeavor.

“There was always an issue, especially with the contractors,” Gould says. “Everybody was scared about getting paid … they had been burned in the past, and they weren’t going to get burned again. We had to do a real sales job just to get bids.”

Getting car consignors offered the same, if not, more problems.

“We worked to get some good cars, and we got them.” Gould said, of the past. “But, we got the good cars together and got the high-end buyers.”

More than 25,000 buyers, sellers or spectators showed up at the auction, with sales exceeding $13 million. The sell-through rate was at 52 percent including motor cars, motorcycles and memorabilia, according to RM Auctions numbers.

Admitting that such a sell-through rate is not up to “RM standards,” Gould counts the auction as a success.

“I won’t say we hit a grand slam,” he says. “But I tell people we hit a home run with two men on base. We sold 950 cars for more than $13 million; a Duesenberg sold for nearly $1 million, and we took good care of our clients … but the most rewarding aspect of the weekend was the many compliments received from visitors and clients about the quality of our sale and of the upgrades to the auction park.”

During the weekend, Auctions America was one of three auctions in the northern Indiana town of 13,000, which was once the home of Auburn Automobile Co. The auctions were held in conjunction with annual activities conducted by the local Auburn Cord Duesenberg Automobile Museum.

“There’s been a lot of improvements … with RM Auctions coming in here, it’s been the best thing that has happened for this auction,” said collector Dick Baruk, who has been attending the Auburn Auction for the past “10-15 years. It’s just better organized, they’ve paved all these roads … it’s just a better auction.”

Gould says the “grand plan” is to return the Labor Day Auburn Auction to the status of its earlier “glory years.”

“We’re just going to keep growing,” he says. “Auburn is a true destination city for that (Labor Day) weekend … even with the economy, we’re doing great. Cars are still a good investment … you’re money is a little more liquid … there’s always a buyer out there for a good car.”

Contact: (877) 906-2437

www.auctionsamerica.com

Eric C. Rodenberg

9/24/2010
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