Spartan Motor Factors explain how expanding an independent factor chain in an age of consolidation is a bold move.
It’s a busy morning in an industrial unit in Bridgend. Pickers run between almost-completed racks of car parts while phones ring and a printer spews out orders. Somewhere, a huge and noisy vacuum cleaner and a hammer drill wail intermittently like some industrial banshee.
We’re in the latest branch of Spartan Motor Factors on opening day, and it’s fair to say that the building, which was once home to a Partco, has not seen this level of activity for many years.
Not that getting the branch ready has been anything like glamour. “We were here all weekend putting up the racking” Director Lee Gratton says balefully, adding that there was still some work to do, but the factor was now ready to the phone lines and the roller doors for the garages of Bridgend.
Spartan is a relatively recent name on the factor scene. Started in 2012 by Lee Gratton, Jason Farrugia and Daniel Webb the company used the Motaquip scheme of supplying a stockpack of parts and consumables to the firm’s first branch in Newport. Both Gratton and Webb had a background of working in factors, while Farrugia was experienced in accountancy.
A branch in Cardiff followed a year later, which became the Head Office. It was, to be polite, a challenging time for an independent factor to go on an expansion drive. Private equity fuelled the growth of the main players, with the Parts Alliance and Groupauto making acquisitions, while Euro Car Parts famously opened a dozen branches in a single day in early 2013, leading to a war of attrition between the big players, which the newcomers had to find an answer. “Yes, it was not easy” laughed Gratton.
SOURCING STOCK
One of the problems related to sourcing stock. “With suppliers, their involvement with other motor factors can prevent you from opening an account” explained Gratton. “When we first opened in Newport, a supplier put in its range of stock – and a month later they came back and took it all out saying ‘sorry, we’ll give you a refund, but there is a conf lict of supply here. We are going to lose one of our biggest customers if we continue to supply you”. This was a reoccurring theme of the early days. “I had to ask why we can’t still have an account, but have our own separate deals?” Gratton pondered.
There was a logical solution to getting hands on brands from a range of suppliers, and that was to join a buying group. Initially, the choice was the PDP, but just over a year later Spartan left and joined the IFA. There are always issues in swapping buying groups, but Jason Farrugia says the biggest problem was removing and replacing stock. “One of the main difficulties was cleansing the old stock out of the five branches” he recalled. “In terms of the brands themselves, it was not too much of a problem with customers as they were familiar with most of them, such asKYBandFAI–itisn’tas though we are trying to sell anything unknown.
On the subject of brands, buying group membership has helped Spartan move some offerings upmarket, “We’ve moved over to Wix and Mahle on filtration and it has improved our filter business no end” Farrugia said. “Before, we had a mix of brands. A quality product is something customers don’t mind paying a small amount extra for, and they don’t try to push you down on the price of filters”.
Apart from access to brands, the knowledge base of the IFA has proven to be useful. “The IFA were really strong in the area and the brands were very strong. My co-Directors knew them from their Welsh Autoparts days, and I must say they have been brilliant” says Farrugia. “In the nine months since we have been members, I have learnt more about MAM, stockholdings and purchasing than I did for the whole five years that we have been in business before”.
Going back to opening day here in Bridgend, it will come as no surprise that the building is well suited to be a motor factor considering the previous occupant. Easy access to allow goods in and out is supported by a large stock room, with potential for a mezzanine. The building has an upstairs area with a meeting room and an office, while downstairs the original counter has been extended backwards to incorporate a small showroom area. This is still the subject of much drilling, hammering and Hoovering on our visit, although we manage to clear the area long enough to get a group photo.
Starting a factor chain in an era of consolidation might not be for the faint hearted, but Spartan hasn’t ruled out further expansion. “We have always been a little off the cuff… If the right opportunity presents itself” concluded Gratton.
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