buy buy buy

April 07, 2020 /// issue no. 98

I was cruising the internet yesterday when I came across the comment that Pelican Parts was owned by ECS Tuning, evil by association, and that everyone should shop elsewhere. Having window shopped on the site for vintage Porsche parts for my imaginary 911 for years, I was confused. This led me down a rabbit hole ending at a private equity firm by the name of Bertram Capital conveniently headquartered behind my local Safeway.

Things I learned — ECS Tuning, an online European parts mega-store, had purchased Pelican Parts in 2017. ECS Tuning had also purchased the BMW-only shop Turner Motorsport in 2015. ECS Tuning itself had been purchased by private equity firm Bertram Capital back in 2014. Finally, I learned how I was also completely unaware that the internet was outraged by everything that went down in the aftermath of these acquisitions.

ECS Tuning started as a small service shop in Ohio in the 1960s. Then the internet happened and turned the savvy next generation of owners in to a global destination. hey also started hawking their own wares, building brands around aftermarket wheels, lighting, and specialty tools to compete with the brands they stocked. ECS prided itself on having great customer service and a huge catalog, but as the catalog expanded the customer service went south. Customers complained about in stock items being on backorder for weeks or being sent wrong parts. And not just a customer here and there. It was a trend. On top of that, ECS employees had cameras placed at each of their desks to make sure they were working all the time. These complaints have gone unnoticed by most and so ECS continues to hum along with its slow shipping and massive catalog.

Bertram Capital ended up doing what it does. They sold off ECS Tuning’s parent company Enthusiast Auto Holdings to another leveraged buyout fund, Cortec Group. Going down more rabbit holes, I found out Cortec had acquired the YETI group which makes the mug I am sipping my coffee out of right now. Cortec must feel pretty good about themselves as enthusiasts everywhere have acquired parts en masse so they can shadetree mechanic in place through COVID-19.

What’s the moral of the story? Shop at FCP Euro? Well, yes. But they also took out private equity debt last year to grow. Cash rules everything around you. ECS Tuning sold because it was time to get paid for the hard work they had put in. Pelican Parts sold because it seemed like the right thing to do for the business and the owner was ready to walk away. Turner Motorsport sold so Will Turner could focus on his racecar builds and racing (). At the end of the day, the ownership groups for these companies stand to make millions of dollars saddling these companies with debt and taking them to the public stock markets. They will be fine no matter how badly they screw customers or engage in sketchy employment policies.

If you’re dealing with cars or aftermarket parts you’ll know you’re buying high and selling low. Many small businesses in the specialty parts cottage industry will not survive this crisis. It’s time to buy all those rare parts you want from the “little guys”. You may not see these businesses on the other side if they don’t get the support now. Just don’t count on the warranty or even having a service rep to reach.

Coffee time,
Steven


daily automotive addiction.