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    • Advance Auto Parts announces plans to close hundreds of stores
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    Advance Auto Parts announces plans to close hundreds of stores

    Umito Posted on

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    Advance Auto Parts announced Thursday that it will close at least 500 corporate stores by mid-2025 and close another 200 independent locations.

    This decision comes as the company declared in a release that its gross profit increased 11% in the third quarter of 2024 to $907 million compared to the same period last year. The company also said its adjusted expenses were $891.2 million, or 41.5% of net sales, compared to 40.2% in the third quarter of 2023, primarily due to lower sales.

    “We are charting a clear path forward and introducing a new three-year financial plan, with a focus on executing on core retail fundamentals to improve the productivity of all our assets and create value for shareholders,” said Shane O’Kelly, President and CEO. said the officer in the report.

    The company also said it incurred high labor expenses due to salary investments in front-line team members, partially offset by a reduction in marketing expenses, the release said.

    Advance Auto Parts serves both professional installers and do-it-yourself customers, its website states. As of October 5, Advance operated 4,781 Advance Auto (4,492) and Carquest (289) branded stores, primarily in the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. Its largest market is Florida, where it operates 522 stores.

    In 2024, through October 5, the company said it opened 23 stores and closed 29.

    The company also served 1,125 independent Carquest-branded stores in these locations, in addition to Mexico and various Caribbean islands.

    Here’s what we know about the company’s plans.

    Which Michigan stores will close?

    It’s unclear whether Michigan stores will be affected by the auto parts maker’s reorganization. The press release does not specify which sites will close.

    The company operates 140 stores in Michigan, including four in Lansing and Warren; two in Battle Creek, Detroit, Livonia, Holland and Sturgis; and one each in Howell, Canton, Cheboygan, Novi, Port Huron, South Lyon, Troy and Westland.

    In addition to the 523 corporate stores, they will also close 204 independent locations and close four distribution centers by mid-2025.

    Why are they closing locations?

    According to the report, sales for the third quarter of 2024 totaled $2.1 billion, compared to $2.2 billion in the third quarter of the previous year.

    Store operations, merchandise excellence and the supply chain will all take a hit as the company seeks to make up for what it lost.

    The report said the closures are expected to help improve spare parts supply, increase spare parts availability, and adjust pricing and promotions to improve gross margin.

    The company said it plans to consolidate its distribution centers into 13 large facilities by 2026, open 60 market hubs by mid-2027 and optimize transportation routes and freight to reduce costs and improve productivity.

    In addition, the company plans to standardize its store operating model, improve labor productivity and accelerate the pace of new store openings, although it did not specify where it would open new stores .

    Jalen Williams is a trending reporter at the Detroit Free Press. Contact him at [email protected]

    Commercial Appeal reporter Jordan Green contributed to this report.

    Umito
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