{"id":214013,"date":"2026-01-03T00:30:08","date_gmt":"2026-01-03T00:30:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/214013\/"},"modified":"2026-01-03T00:30:08","modified_gmt":"2026-01-03T00:30:08","slug":"turners-boss-grant-baker-on-buying-dorchester-the-42-below-deal-and-his-love-of-ferraris","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/214013\/","title":{"rendered":"Turners boss Grant Baker on buying Dorchester, the 42 Below deal and his love of Ferraris"},"content":{"rendered":"

In November the company reported a record first-half net profit of $21.9 million, achieved despite subdued consumer sentiment.<\/p>\n

Baker says Turners succeeds because it sells mid-range vehicles that people buy out of necessity rather than indulgence.<\/p>\n

\u201cPeople need cars for everyday work, so it\u2019s not discretionary,\u201d he says.<\/p>\n

\u201cWhen you need to buy a car, you need to buy a car.\u201d<\/p>\n

Despite the economy\u2019s ups and downs over the last few years, sales have stayed pretty strong all the way through, he says.<\/p>\n

Turners\u2019 model is built around selling cars and capturing the finance and insurance attached to those sales.<\/p>\n

\u201cIn those businesses, you get paid no matter what\u2019s happening, so we know at the beginning of the year how much we\u2019re going to make out of finance and insurance. That\u2019s about half our business now.\u201d<\/p>\n

There\u2019s also a small credit-management arm and, of course, the core used-car business. <\/p>\n

\u201cThat\u2019s our formula,\u201d Baker says. <\/p>\n

\u201cWe need to keep selling cars.\u201d<\/p>\n

His grounding for this formula came years earlier at Xerox and later at Ubix.<\/p>\n

\u201cThat model is very centred around finance and service. We\u2019ve applied those lessons to the car business, and to the best of my knowledge there\u2019s no one else doing that.\u201d<\/p>\n

Turners also holds its own insurance licence, rather than farming policies out to third-party providers. Baker likens the car industry to \u201ca bucket with holes in it\u201d.<\/p>\n

\u201cWater leaks out because commissions go to finance and insurance companies. We try to keep as much of that in-house as possible.\u201d<\/p>\n

The company works on small margins \u2013 less than $1000 per car \u2013 but sells 3000-4000 vehicles a month.<\/p>\n

\u201cWe\u2019ve had five record years in a row through some pretty difficult times, and our latest first half was a record as well. <\/p>\n

\u201cWe have a mix of annuity streams \u2013 finance and insurance \u2013 and our \u2018activity\u2019 business, which is selling cars.\u201d<\/p>\n

Turners\u2019 finance book has grown from $1.6m when Baker arrived to over $500m today.<\/p>\n

Never giving up \u2013 and knowing when to walk away<\/p>\n

Baker has been involved in many businesses over the years, long before and after 42 Below. He says persistence is the key.<\/p>\n

\u201cYou get lots of knocks and you\u2019ve got to get up every time and still believe in your vision. It\u2019s not always easy.\u201d<\/p>\n

But he\u2019s also learned the importance of recognising when a venture is no longer worth the fight.<\/p>\n

An investment in m\u0101nuka honey \u2013 through Me Today, the listed supplements and skincare company he now chairs \u2013 was hit hard by oversupply, reliance on China and Covid-era shutdowns.<\/p>\n

\u201cWe were throwing money at it flat out and it was getting worse, not better.<\/p>\n

\u201cCovid saw the m\u0101nuka market tank.<\/p>\n

\u201cIt costs you more to harvest 1kg of m\u0101nuka honey than you can sell it for.<\/p>\n

\u201cWe pumped a lot of money into that but we had to let that part of the business go.\u201d<\/p>\n

Me Today continues as a supplements-focused business.<\/p>\n

\u201cIt\u2019s still loss-making, but it\u2019s getting better.<\/p>\n

\u201cWe\u2019re working hard on it, and I think it\u2019s got big potential.\u201d<\/p>\n

The company\u2019s 2025 annual report included 12 months\u2019 trading of the King Honey business together with the Me Today brand and the agency business The Good Brand Company, reporting a group loss of $6.02m.<\/p>\n

In July, King Honey \u2013 which had been ring-fenced from Me Today \u2013 went into receivership.<\/p>\n

Zigging when others zagged<\/p>\n

Baker\u2019s tie-up with Turners began in 2008 during the Global Financial Crisis, when about 75 New Zealand finance companies collapsed.<\/p>\n

\u201cI\u2019ve always believed in zigging while others zag. Everyone was out of business, but there was still going to be a need for a finance company. So we bought 20% of Dorchester.\u201d<\/p>\n

The late Hugh Green also held about 20%. <\/p>\n

\u201cHugh said, \u2018Every dollar you put in, I\u2019ll put in a dollar.\u2019 And he did.\u201d<\/p>\n

Dorchester grew, but Baker and his partners realised the difficulty of securing consistent loan origination. The answer was to own the point where customers start their car-buying journey.<\/p>\n

\u201cWe thought we should be in the car-dealing business so we could control origination. We bought a small stake in Turners from Milford \u2013 about 20% \u2013 put someone on the board, and eventually bought the whole thing.\u201d<\/p>\n

Turners\u2019 market capitalisation today is around $729m. <\/p>\n

\u201cWe paid $400,000 for a 20% stake back then, valuing it at $2m. Now we\u2019re firmly in the mid-cap space.\u201d<\/p>\n

42 Below \u2013 the audacious punt<\/p>\n

Few people know Baker and high-profile businessman Eric Watson were partners long before 42 Below, and even worked together at Xerox.<\/p>\n

Watson later founded Blue Star Group, where Baker became chief executive.<\/p>\n

Baker\u2019s 7% stake in that business was his first break when it sold \u2013 resulting in a cash injection and allowing him to do other things.<\/p>\n

After a series of smaller ventures, Baker and his partners wanted to build something with scale.<\/p>\n

Then came future 42 Below partner Geoff Ross, who was brewing vodka in his garage.<\/p>\n

\u201cIt was a good-quality product, selling in small quantities. Geoff saw that the global vodka market was huge, and New Zealand\u2019s was tiny.\u201d<\/p>\n

Baker and partners invested $2m for nearly half the company.<\/p>\n

\u201cIt doesn\u2019t seem like much now given what we sold it for, but at the time it was a lot for a business turning over a few hundred thousand.\u201d<\/p>\n

Their strategy was simple: chase market share, not profit.<\/p>\n

\u201cIt was a software-type model \u2013 put all the money in up front and it takes care of itself later.\u201d<\/p>\n

When they needed more capital, they took the audacious step of listing on the NZX with a market cap of $60m.<\/p>\n

While younger investors loved the idea, traditional bankers hated it.<\/p>\n

Baker says NZX chief executive at the time Mark Weldon was supportive, seeing the stock exchange as a place to raise growth capital, and the company listed in 2003.<\/p>\n

Three years later, 42 Below received a takeover offer from Bacardi Ltd at 77c per share, valuing the company at $138m.<\/p>\n

The cash offer was at a 35% premium to the market price of 57c. The stock has traded between 48c and 71c in the last year.<\/p>\n

Scented candles to skincare \u2013 the Trilogy play<\/p>\n

After 42 Below, Baker helped build what would become Trilogy \u2013 which he says was ultimately a bigger financial success than the vodka start-up.<\/p>\n

It began with a small investment in a candle-making business run by an Australian airline pilot filling in time between flights.<\/p>\n

\u201cHe was making fragrant candles in his garage. It kept getting bigger, so we took a stake. Then it got too big for him.\u201d<\/p>\n

They applied the 42 Below formula: invest more, list the company, raise capital. <\/p>\n

\u201cScented candles became a thing.\u201d<\/p>\n

Ecoya listed on the NZX in 2010 but Baker said the company needed something else.<\/p>\n

To accelerate the business, Baker sought acquisitions.<\/p>\n

Trilogy \u2013 founded in 2002 by Wellington sisters Sarah Gibbs and Catherine de Groot \u2013 was turning over $10m and came up for sale.<\/p>\n

Baker\u2019s group bought it for $18m, rolled their candle business into it, and later added other skincare brands such as CS&Co and Lanocorp.<\/p>\n

The company grew to $150m in turnover \u2013 bigger than 42 Below \u2013 and profitable because of higher margins.<\/p>\n

Ecoya became Trilogy in 2013, reflecting the greater contribution to the business that skincare was making.<\/p>\n

Later \u2013 within a week of each other \u2013 two potential acquirers approached: China\u2019s Citic, and a large pharmaceutical company.<\/p>\n

Citic ultimately bought the company for around $205m in 2018.<\/p>\n

Hits and misses<\/p>\n

Baker describes other investments as \u201clong shots that mostly turned out okay\u201d, including a stake in early mobile-marketing firm Hyperfactory, founded by Derek Handley and his brother.<\/p>\n

\u201cIt was before iPhones. They were making mobile sites and doing mobile advertising. It had potential, but needed more cash and deeper expertise than we had.\u201d<\/p>\n

They eventually sold their 30-40% stake to US publishing company Meredith.<\/p>\n

Then there was energy retailer Empower, which was sold to Contact Energy in 2000 for $23m.<\/p>\n

Over time, Baker has developed an instinct for when a business can be made to work \u2013 and when it needs to pivot.<\/p>\n

\u201cYou go in with an idea, but you have to be prepared to change. Turners is a good example.<\/p>\n

\u201cWhen we bought in, it was an auction business.<\/p>\n

\u201cNow it\u2019s virtually no auctions \u2013 just an integrated car dealer.<\/p>\n

\u201cYou can\u2019t stick rigidly to a vision.<\/p>\n

\u201cYou have to find the opportunities you didn\u2019t expect.\u201d<\/p>\n

Naysayers and imagination<\/p>\n

New Zealand, Baker says, has no shortage of sceptics.<\/p>\n

\u201cPeople don\u2019t have a lot of imagination. They just want to look at all the ways something won\u2019t work.\u201d<\/p>\n

One of 42 Below\u2019s biggest detractors was Devon Funds\u2019 Paul Glass.<\/p>\n

Baker notes with irony that Devon Funds had just bought half a million of his shares in Turners, the $3.8m in funds from which he will be spending on his next Ferrari.<\/p>\n

\u201cIt\u2019s quite funny how that worked out.\u201d<\/p>\n

Baker points to Xero founder Rod Drury and Xero as someone who backed himself despite early criticism.<\/p>\n

\u201cWhen we listed 42 Below, Rod came to see Geoff and me to ask how we did it.<\/p>\n

\u201cIf you look at his listing, he did exactly the same thing \u2013 pre-listing valuation of $60m, sold 25%, raised $15m.\u201d<\/p>\n

Xero also had a poor reception at first, trading around 40c a share.<\/p>\n

Today it trades on the ASX at A$118 ($135) a share.<\/p>\n

\"GrantGrant Baker with his Ferrari Enzo. Photo \/ Suppied <\/p>\n

Ferraris \u2013 the expensive habit<\/p>\n

Baker admits one reason he still works so hard is his long-running Ferrari addiction. He has owned nearly 50; he currently owns 10.<\/p>\n

\u201cIt\u2019s an expensive hobby and I need to feed it.<\/p>\n

\u201cFerrari has range cars that anyone can order, but the best cars \u2013 limited editions \u2013 only go to people who\u2019ve done their apprenticeship buying the range cars.\u201d<\/p>\n

He has also done \u201ca reasonable amount\u201d of motorsport and has backed rising New Zealand Formula One talent Liam Lawson.<\/p>\n

\u201cHe\u2019s definitely fast enough. Very, very good.\u201d<\/p>\n

Baker long ago stopped caring about criticism.<\/p>\n

\u201cI used to get a lot of stick, but not anymore.\u201d<\/p>\n

He\u2019s not on any other boards, and wouldn\u2019t want to be.<\/p>\n

The key to surviving in entrepreneurship, he says, is simple: \u201cMake your successes bigger than your failures.\u201d<\/p>\n

And he often recalls advice from a favourite uncle: \u201cDon\u2019t be too crushed by your failures.\u201d<\/p>\n

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.<\/p>\n

Stay ahead with the latest market moves, corporate updates, and economic insights by subscribing to our Business newsletter<\/a> \u2013 your essential weekly round-up of all the business news you need.<\/p>\n","protected":false},"excerpt":{"rendered":"In November the company reported a record first-half net profit of $21.9 million, achieved despite subdued consumer sentiment.…\n","protected":false},"author":2,"featured_media":214014,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[54328,95,52056,13990,4282,138,5098,37462,1656,3468,4527,129540,2036,129544,129541,71,2347,293,13457,2882,129543,111,139,69,58416,1118,90,129542,26660,6100,223,13016,303],"class_list":["post-214013","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-54328","tag-and","tag-baker","tag-below","tag-boss","tag-business","tag-buying","tag-chairman","tag-company","tag-deal","tag-doesnt","tag-dorchester","tag-entrepreneur","tag-establishment","tag-ferraris","tag-from","tag-grant","tag-his","tag-look","tag-love","tag-midsized","tag-new-zealand","tag-newzealand","tag-nz","tag-nzxlisted","tag-of","tag-on","tag-seatofthepants","tag-sound","tag-still","tag-the","tag-turners","tag-very"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/214013","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=214013"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/214013\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/214014"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=214013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=214013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=214013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}