Advance Auto Parts is hitting the brakes on more than 700 stores as a part of its broader turnaround strategy. Here is everything you need to know.
Advance Auto Closures Announced
The nearly century-old auto parts retail giant announced on Thursday that it plans to close over 700 of its nearly 5,000 stores by mid-2025. This includes 523 corporate stores, 204 independent locations, and four distribution centers, primarily in the Western United States. The exact locations of the closures have not yet been disclosed.
Sales and Earnings Struggles
The North Carolina-based chain announced the closures aim to “shore up finances” after dismal earnings reports and declining sales. Comparable store sales dropped 2.3% in the third quarter, while rising expenses, attributed to “wage investments in frontline team members partially offset by reduced marketing expenses,” added pressure. Shares fell nearly 5% in premarket trading as the financial challenges mounted.
Restructuring Costs
The company said restructuring of AAP is expected to cost between $350 million and $750 million, covering expenses such as severance, lease terminations, and asset charges. “We are charting a clear path forward and introducing a new three-year financial plan, with a focus on executing core retail fundamentals to improve the productivity of all our assets and to create shareholder value,” CEO Shane O’Kelly said in a statement.
Plans for the Future
Advance Auto Parts plans to open at least 60 new market hub stores by mid-2027, with a main goal to boost asset productivity and shareholder value. The company also recently sold its Worldpac subsidiary for $1.5 billion as part of its restructuring efforts.
For more retail coverage, please sign up for our free newsletters.
