What went wrong with Unipart Automotive?

What a shame to be reporting that Unipart Automotive has collapsed, resulting in the loss of over 1,200 jobs; especially at a time when the UK car retailing market is booming.

The troubled performance of the automotive distributor, once the UK’s biggest operating 180 branches, has been in the public domain for some time although it was hoped that a reported £37.5m bank refinancing package would help put it back on track.

The branch network business, previously known as Partco, diverged from the Unipart Group as recently as 2011. Under the new ownership of H2 Equity Partners, the Dutch private equity firm, which already owned Sator the Benelux and Northern France parts supplier, it was intended to become the dominant force in the UK and European parts supply market. It didn’t.

Its problems date to that sell off. Unipart Group sold the business because it was under-performing and needed massive investment to grow.

At the time Unipart Group chief executive John Neill told me it needed to expand its network and the number of parts it supplied.

“What’s necessary for future success is a need for more outlets and system scale; for system scale you need a partner,” he said.

It was this shaky start and tough competition from the rapidly expanding Euro Car Parts, which, incidentally acquired Sator last year as part of its continental push, which made for what turned out to be insurmountable challenges.

While the news of Andrew Page and the Parts Alliance acquiring 33 branches between them is welcome, especially for the 361 staff employed, the collapse of Unipart Automotive, in a buoyant car retailing market, is disappointing.