Posted on 06/30/2014 10:29:11 AM PDT by 2ndDivisionVet
During a meeting with analysts and investors on Wednesday, Advance Auto Parts executives were asked how many stores they expect to close as a result of the company's acquisition of Raleigh-based General Parts International.
George Sherman, Advance Auto's president, said the company is consolidating 100 stores as part of a first round of closings.
"There will be more going forward," he said. "We have to assess fully 1,200-plus stores across the country. There will be a large group of consolidations, but there will be a lot of conversations where we flip the banner and there will be some relocations."
General Parts operated 1,248 Carquest locations and had 38 distribution centers across the U.S. and Canada when it was acquired in January for $2.04 billion. The company also serviced about 1,400 independently owned Carquest locations.
Advance Auto had 4,049 stores and 12 distribution centers before the merger. The two companies combined have more than 70,000 employees.
Advance Auto CEO Darren Jackson said the company was not avoiding the question by not providing a clearer picture on the number of stores and distribution centers that might close.
"We're not trying to sidestep the question. What happens is our teammates are listening to this webcast. They are all trying to figure out is it going to be my store," he said. "So when we start talking about those things, we create disruption in the base business. So like last week when we were able to talk to our team members about closing offices, and you can bet we already had talked to the teams at those 100 stores. ... We're trying to make sure the base business doesn't get disrupted, because, again, it is not about the real estate. And we are going to need many of those teammates to come over and work in the Advance stores and in some cases go to work in the Carquest stores."
Last week Advance Auto announced a corporate restructuring where it will have some departments based in Roanoke, Va., where it has its headquarters, while other functions will be based in Raleigh. The company's executive team is to be in Raleigh.
Advance Auto was awarded a state incentives package worth more than $17.4 million if the company creates 600 jobs in Raleigh and invests more than $5 million. Some of those new jobs are expected to be General Parts employees who are simply rehired by Advance Auto.
Advance Auto also expects to lay off some General Parts employees and offer others the opportunity to relocate to Roanoke.
I remember when they were Parts America and you could use your Sears charge card there as they were part of Sears Roebuck.
Bush’s fault.
Could it be because there are too many parts stores within a block of each other in most larger areas? Wherever I’m at, if I see one, there are two competitors within a block, sometimes next to each other.
The knowledgeable ones who know parts and vehicles will no doubt be a majority of any cuts.
I’m not a super automotive guru and forgot a lot over the years but most of the people that I run into working the counters don’t know much beyond the computer.
I have 5 or so within 10 minutes of me.
yup, they will keep the stupid ones..
I like advance, but I do all my shopping on line and with a promo code.
Normally I can do 20 of 50, 30 off 75 40 off 100...
order your parts right and you can save a TON.
I as well, and I can drive 10 miles in any direction of this area and find 3-5 more, all clustered. It’s amazing that any of them are making enough money to stay in business, even here in Nebraska where the percentage of new cars on the roads is the lowest of about any state and a lot of regular maintenance goes on to keep those old cars on the roads. The reason for so many old cars? It’s the abusive property tax you pay on the new vehicle and the still high prorated property tax you pay on it for years afterward. My own car is a 99 Ford which I bought used when it had only 1400 miles on it.
I went to work with Autozone in the mid-1990s. They asked some basic automotive questions, but it was the beginning of the end of the knowledgable parts-counter guy. Many were still gearheads, and worked on their own cars, but more and more today, few understand the basics, let alone complicated issues.
A few years back I went to one of the chain stores for points and condensers. The guy thought it was air conditioning.
I do as much as I can online as well. Most of what I am after is special order for my ancient Willys Jeep.
I don’t know how they stay in business either. I rarely see a full lot and most of the merchandise is the same.
Points? Condensors? Heck, you were probably working on something older than the kid behind the counter.
It was a couple years younger than me. The parts weren’t even close to right.
I have AA within 2 miles and O’Reilly, NAPA & Autozone along with another AA within 10. They all have more or less the same stuff for the same price, so I don’t know how they all stay in business. It’s nice to have a store so close when a battery goes bad or you need something else quickly, but I prefer to plan ahead and buy online when I can.
To be fair, points and condensers haven’t been shipped in cars since the early 1970s. That’s 40 years gone now.
If you walked into an auto parts store and asked for a hand crank for an Essex Closed Coach in the 1960s, you would have gotten a dumb look then too.
I suspect that they’re actually going to do a full location by location in depth analysis first. That’s not normal M&A work as it takes too long and it’s not necessary.
A lot of their income is from auto repair shops local to the parts store.
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