Its first NAPA superstore opened last week in Queensland, bringing the warehouse style of automotive parts retailing to Australia after being successful in North America with more than 6000 outlets.
GPC Asia Pacific executive general manager of automotive parts division, Wayne Bryant, said the move into Australia coincided with an opportunity to partner with the operator of one of Australia’s biggest and most successful Autobarn stores, Logan City in the Brisbane suburb of Slacks Creek.
The new store has a floorspace of 2800 square metres which puts it at a similar to the size of rival Supercheap Auto’s new outlet in Penrith.
Mr Bryant said Logan City had been operating as an Autobarn store since 1996 and owners Wayne and Julie Wode decided that with new entrants in the industry and a growing complexity of the carpark, a partner would improve its future.
“They looked at large companies including us and in the end, went with GPC because the culture and strategies were aligned,” he said.
The new NAPA store opened last Thursday and Mr Bryant said it had very strong patronage “so we’re very encouraged by the start of this business”.
“We’re excited and we see great potential for NAPA to grow,” he said.
“It’s a terrific model with excellent customer service ethos. That sets it apart from its competitors.”
The store will be as big as Supercheap’s new outlet in Penrith. But GPC will not follow Supercheap and its partner Bosch into the service business.
“We are a trade player and we are conscious of our role in supplying the trade,” Mr Bryant said.
“We have Repco Authorised Service which is an independently owned group of service centres.
“We wouldn’t want to be in competition with these service centres so we are focusing on supplying trade customers.”
The arrival of NAPA – and the plans for its national expansion – will not affect similar growth plans for GPC’s Covs Parts and Repco businesses.
“We remain absolutely committed to growing Repco in Australia and New Zealand,” he said.
“The announcement about NAPA in no way diminishes our plans for Repco. We are adding stores, relocating stores and consolidating and acquiring new stores.
“We are continuing to build our footprint and our goal is to have more stores closer to our customers than any other stores.”
Mr Bryant said GPC sees an opportunity to grow the NAPA brand across Australia and it intends to continue to search for the right opportunities for it to grow.
“But we are absolutely committed to growing all our brands – Repco is obviously the largest network – but we introduced NAPA because we felt the brand was fitting for a particular store format,” he said.
“The new store is the largest, or one of the largest, in Australia. We felt it was fitting for it to have its own identity and is complementary to our existing brands.”
“NAPA is an opportunity for us to open a new format. We have Repco with more than 320 stores and that has a dual role by supplying trade and general customers.
“We also have Covs Parts outlets which is focused on the trade and now we have NAPA, which is a ‘big box’ destinations format.
“It’s a bigger format than the typical Repco store and that’s why we have gone with the NAPA identification. It’s a place you go to to get anything you want related to automotive.”
Mr Bryant said NAPA could be compared with the retail approach taken by Bunnings, where it is a single location for all the needs of people wanting automotive products, rather than hardware products.
“This is a different approach than what we have taken with Repco or Covs,” he said.
“We will assess the opportunities for the future with NAPA but we are not rushing the process.”
Mr Bryant said GPC would support the transition to the NAPA stores and then, with growth, look at all options.
“This would include looking at acquisitions of existing stores but also, where it makes sense, we’re prepared to look at greenfield developments.
“If we decide to buy an existing outlet we will also see what format that store suits – it could be Repco or Covs or NAPA. So everything will be on a case-by-case basis.”
More than 70 per cent of GPC’s business is in supplying to the trade.
“We have a turnover of more than $1 billion a year to the trade and wholesale businesses in Australia,” Mr Bryant said.
“GPC is a large player with more than 5000 people, 550 stores and 12 distribution centres across Australia and New Zealand – so we are pretty comfortable where we are.
“But in our industry there is always room for new players and disruption, such as the emerging e-commerce sector which is changing the way we retail.
“We see e-commerce as continuing and that’s because of the complexity of the automotive sector.
“It is important that we continue to invest in our business to ensure that our customers get the right part at the right time and at the right price. To do that we have to have more stores closer to our customers.”
Mr Bryant said that a large part of GPC’s operation is a business-to-business (B2B) proposition.
“This is growing. We have been developing our e-commerce business over the past few years and building our dual-format capability,” he said.
“Others may have moved faster but it is certainly something on our agenda and forms part of our future plans. It has become a requirement to operate in both online and in-store and is now what the customer expects.”
Who is GPC
GENUINE Parts Company (GPC) is a $A15 billion New York-based car parts giant founded in 1928 with its largest division known as the National Automotive Parts Association (NAPA).
GPC made its foothold in Australia with the purchase of Repco for almost $1 billion in 2013.
The deal included the (then) 312 Repco stores along with the Ashdown Ingram auto electrical and air-conditioning parts business which together had revenue of $1.3 billion a year.
It was eyeing the automotive assets of grocery wholesaler Metcash but missed out, seeing Metcash’s Autobarn, Autopro, Carparts, ABS and Midas businesses were sold in 2015 to rival Burson Group, now called Bapcor Ltd, for $283 million.
But GPC hasn’t been slow on acquisitions. Over the past five years it has accumulated (via Ashdown Ingram) Australian Electrical Automotive with seven outlets and annual revenues of $10 million to $12 million; the 11-store R&E Auto Parts; RDA Brakes; PJL Diesel Electric; and a tyre repair business previously owned by Bosch.
GPC bought Repco in two tranches, first with a 30 per cent interest and then the remaining 70 per cent for close to $800 million in 2013.
Repco was listed on the Australian Securities Exchange as a stand-alone entity between 2003 and 2006, but was de-listed when it was bought by former owner CCMP in 2006.
In February 2016, GPC Asia Pacific bought Covs Parts from Automotive Holdings Group Limited (AHG). Covs had 25 automotive parts stores in Western Australia.
But the ACCC stepped in and forbade the sale unless four stores – the regional towns of Karratha, Port Hedland, Esperance and Albany – were excluded from the transaction to remove the monopoly in those towns.
AHG kept the four outlets under its AMCAP parts business and the sale of the rest went through to GPC.
By Neil Dowling
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