ED’S VIEW: Just who is Parts Town, the new owner of First Choice?

Parts Town

The management of First Choice Group confirmed yesterday that the business has been acquired by PT Holdings, the parent company of global catering spares outfit Parts Town. So just who are the new owners of the UK’s largest spare parts provider? Andrew Seymour takes a look.

When John Whitehouse and Carl Bate set up First Choice Catering Spares 18 years ago, very few people in the industry at the time would have appreciated the potential of the third party OEM spare parts sector.

But in a little over eight weeks time the group will move into a 100,000 square foot, state-of-the-art HQ and distribution centre in Staffordshire that will represent an investment of almost £4m.

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First Choice is by no means the only catering spare parts provider in the UK market, but its sheer scale and year-on-year growth makes for impressive viewing. In its last full financial year the company turned over nearly £28m at a gross profit of 28%. It employs 140 staff and provides genuine OEM parts for most of the leading brands that have cooking, refrigeration and beverage equipment installed in UK kitchens today.

There can be no doubting that such heavy duty numbers would have helped capture the attention of its suitor Parts Town.

But just who is the company taking over one of the UK market’s biggest success stories, and what is its history?

US-based Parts Town generated sales of some $300m (£247m) last year and claims to boast the largest in-stock inventory of OEM foodservice equipment parts in the world.

The business has experienced phenomenal growth over the past 30 years, but like First Choice it had to start out somewhere. It was 1987 when Reedy Industries, a market leader in field service solutions, founded Parts Town to focus on restaurant equipment parts distribution. The idea was that it could support local field service companies with the components required to support their customers.

According to its website, it actually remained a relatively small business for its first 16 years of existence, with sales of less than $3m (£2.5m) up until 2003.

But then, suddenly, there was a huge sea change in the parts market as it became apparent that the restaurant equipment parts market was in need of a wholesale shake-up.

Manufacturers were increasingly frustrated with declining OEM parts sales, customers were disappointed by a lack of access to parts and low customer service standards and major chains were demanding improved service and parts solutions.

By Parts Town’s own admittance, the industry had fallen behind the times in terms of technology and innovation with virtually no e-commerce available.

Parts Town 2
Parts Town has invested heavily in mobile and online spare parts ordering facilities to make the buying process easier for customers.

The time for change had arrived and, although a small fish at the time, the company set out with an ambition to alter the industry forever.

Leadership was recruited from the world’s leading distribution businesses, a new mission was developed and a comprehensive long-term strategy was put in place.

These efforts evolved Parts Town into a culture-driven, customer-focused distributor that would partner with the industry’s equipment manufacturers to grow genuine OEM parts sales and improve the overall service and parts experience in the industry.

The company was certainly not afraid to innovate and challenge industry norms.

One of the steps it took at that time was to eliminate all offices and walls separating its team members to build an open, teaming environment that emphasised sharing of information.

It also introduced a simple, but not necessarily widespread, principle of answering the phone in three rings or less. Small details count when it comes to customer service and the company insists this policy remains part of its DNA today.

From 2003 through 2012, Parts Town’s compound annual growth rate remained over 35% per year, with the business impressively racking up annual sales growth of more than 30% throughout that period.

Revenues soared as it brought in same-day shipping, while approved parts supplier agreements with some of America’s largest chains began to cement its reputation as the go-to parts provider. In 2005, meanwhile, it signed the industry’s first major master distribution partnership with Prince Castle, the US manufacturer of cooking and holding solutions for the fast food sector.

As little as six years ago, the company employed 50 people. Now it has more than 200 staff on its books and occupies a 140,000 square foot distribution facility in Chicago. First Choice is its second acquisition in as many years after it bought out FESCO, a Knoxville distributor of foodservice equipment service and parts.

Parts Town has also been at the forefront of the digital changes that have come to shape the spare parts market. was launched 10 years ago and very quickly became the most utilised genuine OEM parts website in the world. Two years later it rolled out the industry’s first mobile optimised website. And more recently, it created an app that includes image recognition parts ID software, allowing customers and engineers to match up parts with its database.

As with most acquisitions of this nature, it is unlikely that any obvious, immediate changes will be seen in the day-to-day running of the business. First Choice Group will continue to operate under its existing brand with John Whitehouse as managing director and Carl Bate as director of procurement and logistics.

The really interesting thing will be how it can utilise its new parent’s resources and relationships to take First Choice from a £30m business to a £40m business and beyond.

As well as giving First Choice access to vast OEM stocks not currently readily available to it, it could potentially up new avenues of business for the company in Europe and global partnerships that might otherwise have been harder to obtain.

Either way, some 20 years after First Choice’s management started the business from scratch, the vast potential of the catering spare parts market is most certainly no secret anymore.

Tags : acquisitionFirst Choice Catering SparesParts TownPT Holdingsspare parts
Andrew Seymour

The author Andrew Seymour

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