WHEN it comes to buying hybrid vehicles, consumers continue to show their patience.

The latest example are the lines forming for the first luxury gas-electric hybrid sport utility vehicle, Lexus' RX 400h, which was introduced in January at the North American International Auto Show in Detroit.

Originally conceived as a 2005 model year release, delays have pushed the RX 400h into next year, officially rendering it a 2006 model. The delays mean local dealers have been adding to their waiting lists even as they fret about their ability to deliver the vehicles in a timely manner.

Though delivery is not now expected until at least April, Longo Lexus, an El Monte affiliate of Penske Automotive Group, said it has a waiting list of more than 300 names. Jim Falk Lexus of Beverly Hills has collected 225 names, Lexus of Glendale has a 150-person list and Vista Lexus in Woodland Hills has more than 100 names.

"Demand has been overwhelming," said Josh Monesson, sales and leasing consultant for Jim Falk Lexus. "We've set records for the largest waiting list of any new car and far exceeded expectations."

Toyota Motor Sales U.S.A. said that by the end of August it had received more than 9,000 orders for the RX 400h--more than for any vehicle in the 15-year history of its Lexus brand. Toyota expects to produce 24,000 RX 400h SUVs a year. While the manufacturer's suggested retail price has not yet been set, many dealers expect it to be $4,000 to $5,000 above its all-gasoline cousin, the premium-equipped RX 330, which has a sticker price of $37,800.

Similar enthusiasm and long waiting lists have occurred for Toyota's Prius hybrid. And, like the Prius, the RX 400h is causing concern among dealers about supply meeting demand.

"Anytime Lexus comes out with a new product, demand is so high they can't keep up," said Kamran Kamrava, sales manager at Vista Lexus. "These people who have left deposits expect to get their cars the first month the car is going to be out and that's going to be impossible." A three- to six-month waiting period following the launch is more likely, Kamrava said.

Some dealers are taking names without a deposit, while others are asking for deposits ranging from $500 to $5,000. Still others, such as Lexus Santa Monica and Keyes Lexus in Van Nuys, are refusing to accept pre-orders to prevent unrealistic expectations from customers.

No More Applause

Less than a month after the suicide of its Chairman and Chief Executive, Bob Solomon, plush toy maker Applause LLC has been put into an involuntary Chapter 7 bankruptcy filing.

Solomon's nephew, David Socha, who is chairman of Beverly Hills Teddy Bear Co. in Santa Clarita, had stepped in as general manager of the financially troubled company following Solomon's death. The Daily News of Los Angeles reported on Aug. 28 that Socha intended to keep the business running.

Calls to Socha were not returned.

Ronald Rus, a partner at Rus Miliband & Smith, the Irvine law firm that filed the bankruptcy petition on behalf of Applause creditors, said the company owes its suppliers $3 million.

Applause has retained bankruptcy counsel and intends to convert to Chapter 11 this week, which would enable it to continue operating. If it remains in Chapter 7, its assets will be liquidated, Rus said.

"The death of Mr. Solomon only magnified the issue and exacerbated the problem," he said. "Applause clearly had financial issues before that happened."

Applause designs and markets a line of stuffed toys called Dream Pets, as well licensed characters such as "Winnie the Pooh," "Bob the Builder," "Lord of the Rings" and "The Simpsons."

Preying at El Dorado

The folks behind supper clubs Prey and Shelter are purchasing the assets of Mexican restaurant and nightclub El Dorado Cantina out of bankruptcy and are preparing to launch a new concept: a sushi supper club called Katsu-ya.

SBE Entertainment Group will convert the restaurant, in an office complex at 11777 San Vicente Blvd. in Brentwood, to the first of what is projected to be five such clubs, said SBE Chief Executive Sam Nazarian. Its other operating partners are Reza Roohi and Costas Charalambous.

SBE is in escrow on its deal to purchase the restaurant's assets for less than $1 million, said Nazarian. El Dorado will continue to operate for the next three or four months, he said.

Staff reporter Rebecca Flass can be reached at (323) 549-5225, ext. 230, or at rflass@labusinessjournal.com.

COPYRIGHT 2004 CBJ, L.P.
COPYRIGHT 2004 Gale Group