White Collar Reset: The toys for very rich boys club gets a new spin
For an annual fee of $10,000 to $20,000 or more, bond traders, real estate developers, the occasional celebrity and other big shots in the most car-unfriendly city in America get to drive 47 of the world's most insanely fast and ridiculously expensive automobiles whenever and wherever they want. One weekend it could be tooling down to the Jersey shore in a reproduction 1965 Shelby Cobra, the next, rumbling out to Montauk in a $235,000 Ferrari F430. Because you never know when 490 base horsepower will come in handy in the bumper-to-bumper traffic on the Long Island Expressway.
I first came to know of the club through my former employer, a publisher of luxury men's lifestyle magazines for the financial and private jet communities, which the club's owners helped support with advertising. The sudden free-fall in revenues for and from companies like the CCCM is, of course, a major reason why those magazines no longer exist and I'm out of a job. So you can imagine my surprise recently when I ran into Michael Prichinello, the bearded 34-year-old car and motorcycle enthusiast who co-owns the club, and, with as much sympathy as I could muster, asked, how's business? "Actually, really really good," he said.
As it turns out, Prichinello and his partners, Phil Kavanagh and Zac Moseley, may take the prize for the cleverest repositioning of a luxury brand in the face of the Great Recession I've heard yet. It wouldn't seem possible for a business focused on monetizing vehicles that average 10 miles per gallon and are built to travel four times the maximum legal speed limit to reinvent itself as a "value proposition," but that's exactly what the Classic Car Club Manhattan has done.
"When the market crashed last September, we were as freaked out as anyone," says Prichinello. "I figured half our members had just lost their jobs. But that week, Zac, Phil and I holed ourselves up in a room for three days and we realized that if we played our cards right, this could be a great opportunity."
What the CCCM guys understood, and helped foster with their new marketing strategy in a way that most of the rest of us in the luxury sector didn't, was that for a certain rarefied specimen of male consumer, forking over $10,000 or even $20,000 in car club dues could seem like the height of responsible downsizing.
Say, you're a trader looking to cut back his expenses. As you scrutinize your monthly nut -- the $20,000 for the condo in the city, the $30,000 for the house in the Hamptons, the $15,000 in dinners at three- and four-star restaurants -- the $60,000 in annual depreciation, garaging and maintenance costs on the Porsche Cayenne is an obvious first place to cut. But then how are you going to get to Sagaponack? Take the jitney? I don't think so.
"I'd say probably half the new members who joined over the past year are people who started worrying about their jobs last September," says Prichinello. "The cool part is before, they owned a car and maybe didn't even really know how to drive it to its full potential. Now, they become a member, they come out and do track days with us, and we get them SCCA Race-certified. They get to hang out here at the club and go on rallies in Europe. All of a sudden, instead of it being a status thing, it's truly is more about the love of these cars."
So, now that the recovery is supposedly underway, does that mean Prichinello and his partners are rooting for a double-dip recession? "I don't think so," says Moseley. "Just because people feel better about their situations, doesn't mean they're going back to spending $130,000 or $230,000 on a car any time soon. I think they're going to be much more responsible with the money they have, which isn't hard. Because they were so irresponsible before."
Moseley points out that pre-crash a tiny percentage of new business came through referrals from existing members. "They didn't want their friends to know that the car they were driving wasn't really theirs," he explains. Now most new business comes through referrals. "It's a complete reversal," he says. "They want everyone to know the car is in the club and they didn't buy it. It's their way of saying, 'See, I'm not a total jackass.'"
Before you feel too warm and fuzzy about Classic Car Club Manhattan's success, though, there is one cloud lingering over this tale. Prichinello, Moseley and Kavanagh (who founded the original branches of the club in London and Edinburgh) have been encouraged enough by the results of their new direction, they're now looking to open additional locations in Miami and Los Angeles. So, not long ago, they began strategizing on how to approach Citibank, their bank, for a loan. They did what all the small business manuals advise -- they spent several months getting to know their representative at their neighborhood branch and educating him on their business, a business which, by the way, will funnel some $4 million through Citibank's accounts in 2009.
So what do you think Citibank, whose parent Citigroup (C) has been the recipient of $45 billion in government bailout money, offered Classic Car Manhattan club for their expansion plans that would create 45 new jobs in South Florida and L.A.?
"They offered to upgrade us to a Checking Plus checking account with $5,000 in overdraft protection," says Prichinello. "Oh, and they also wanted to come in and talk to our employees about banking with Citibank and their 401(k)s."
Apparently for some people in the financial sector, being thought of as a jackass is still okay.
A short video about the club is below; be forewarned, it includes several curse words.