Advance Auto Parts going out of business concerns have intensified as the automotive retailer announces the closure of over 700 locations across the United States. This massive restructuring includes shuttering 500 corporate-owned stores and 200 independently operated locations, representing 10.6% of their total retail presence. Additionally, the company’s recent sale of its Worldpac subsidiary for $1.5 billion signals significant changes in their business strategy.
In fact, the company’s financial struggles became evident when they reported losses exceeding $48 million in November 2023, with shares dropping by $0.83 each. As a result of declining sales and rising costs, these store closures mark the most substantial consolidation in the company’s recent history, occurring during a period when the retail sector has already announced 6,200 store closures in 2024.
Let’s dive deep into the current state of Advance Auto Parts, what these changes mean for customers, and the broader implications for the auto parts retail industry.
Current State of Advance Auto Parts Business
The financial trajectory of Advance Auto Parts going out of business concerns became evident in their third quarter 2024 results. The company reported net sales of $2.1 billion, marking a decrease from $2.2 billion in the previous year. Furthermore, comparable store sales declined by 2.3%, while operating income plummeted to just $403,000.
Recent financial performance
The company’s financial struggles intensified as they posted a surprising quarterly loss of $0.42 per share. Subsequently, their gross profit increased to $907.9 million, representing 42.3% of net sales compared to 36.9% in the previous year. However, higher labor costs and wage investments in frontline team members offset these gains.
Store closure announcement details
Consequently, Advance Auto Parts going out of business plans include significant restructuring. The company announced:
- Closure of 523 corporate stores
- Exit from 204 independent locations
- Shutdown of four distribution centers
- Complete withdrawal from West Coast operations
The restructuring costs are estimated between $350 million to $750 million, including $45 million in severance costs and $100-250 million in lease terminations. Meanwhile, the company completed the sale of its Worldpac subsidiary for $1.5 billion to strengthen its balance sheet.
Impact on stock price
Notably, is advance auto parts going out of business concerns have severely impacted investor confidence. The company’s stock has declined more than 37% in 2024, closing at $38.69. The advance auto parts going out of business locations announcement initially caused the stock to surge 10% as investors welcomed the restructuring plan, though shares remain near a 15-year low. The company’s preliminary guidance for fiscal 2025 projects sales between $8.4-8.6 billion, significantly below analyst expectations of $10.79 billion.
Store Closure Timeline and Locations
The massive restructuring plan of advance auto parts going out of business strategy primarily focuses on specific regions and store types across the United States. The company’s strategic realignment affects both corporate-owned and independent locations, marking a significant shift in its retail presence.
Which stores are closing
The advance auto parts going out of business locations include a complete withdrawal from the West Coast market. Specifically, all 139 California locations will cease operations. The company’s footprint reduction spans multiple states, with significant presence in:
- Michigan (140 stores across cities like Lansing, Warren, Detroit)
- Indiana (110 locations statewide)
- Arizona, Florida, and Texas locations among the first 224 stores marked for closure
The advance auto parts going out of business sale will affect 523 corporate-owned stores and 204 independent locations. Moreover, four distribution centers, specifically on the West Coast, will shut down as part of this consolidation. As the automotive industry faces shifts, investors also express concerns about Chrysler’s financial stability and how such trends impact major brands.
When closures will happen
The timeline for advance auto parts going out of business plans extends through mid-2025. Essentially, the company has structured a phased approach for these closures. Initially, the initial phase involves closing 200 leased locations and 24 owned stores in the coming weeks.
The company aims to consolidate its distribution network to 13 large facilities by 2026. Accordingly, advance auto parts going out of business restructuring includes plans to open 60 market hub locations by mid-2027. This strategic transformation focuses on optimizing transportation routes and improving operational efficiency across remaining locations.
Is advance auto parts going out of business affecting all stores? No – the closures represent approximately 16% of their total retail footprint. The company maintains strict control over closure information, declining to provide a comprehensive list of affected locations. The final deadline for offers on leased and owned locations currently on the market is set for March 2025.
What This Means for Current Customers
Current customers affected by advance auto parts going out of business changes need to understand several critical updates to policies and services. Presently, these modifications impact everything from store access to warranty claims.
Store liquidation sales
The advance auto parts going out of business sale has begun at closing locations, offering discounts on remaining inventory. Primarily, stores marked for closure provide 15% off on next purchases, with some exclusions applying. These liquidation sales extend across the 523 corporate stores and 204 independent locations scheduled for closure.
Warranty and returns policy changes
Recent alterations to warranty procedures have sparked concerns among customers wondering is advance auto parts going out of business affecting their existing guarantees. The company’s return policy allows customers a 45-day window for most items. Nevertheless, certain restrictions apply:
- Electrical components and clearance items are non-returnable
- Returns require original packaging and receipts
- Batteries can only be returned under warranty coverage
- Online returns must include packing lists
Undoubtedly, warranty claims have become more complex at advance auto parts going out of business locations. Several customers report difficulties with lifetime warranty claims, particularly at stores preparing for closure. The company’s new policy requires customers to present detailed documentation for warranty services, including original purchase receipts and valid identification.
Alternative auto parts retailers
As advance auto parts going out of business concerns grow, customers have numerous alternative options. O’Reilly Auto Parts stands out for its emphasis on customer satisfaction and expert staff. AutoZone maintains an extensive inventory of over 600,000 parts and accessories. NAPA Auto Parts offers both online shopping and an extensive network of physical stores across North America.
Alternatively, customers can explore online retailers like RockAuto, which specializes in OEM and aftermarket parts. For immediate needs, local options include:
- Pep Boys – Known for comprehensive automotive services
- CarQuest – Specializes in automotive parts and accessories
- U.S. Auto Parts Network – Focuses on online retail
Impact on Advance Auto Parts Employees
The workforce impact of advance auto parts going out of business extends across multiple states, primarily affecting thousands of employees through a series of planned layoffs. The company’s restructuring has triggered WARN notices in several regions, with Texas alone seeing 67 workers affected across seven locations.
Job transition plans
The advance auto parts going out of business strategy includes a structured approach to employee transitions. In California, the distribution center on Mcmurtrey Ave will begin employee separations on February 15, 2025, affecting 64 workers. Similarly, the Milwaukee region faces 51 job losses, with affected employees lacking union representation or bumping rights.
The company’s transition strategy encompasses:
- Converting select stores into market hubs
- Implementing gradual responsibility transfers
- Providing reasonable cooperation during duty transitions
Is advance auto parts going out of business affecting all regions equally? The impact varies significantly by location. For instance, the Bakersfield distribution center will complete its closure by March 29, 2025. The advance auto parts going out of business locations closures align with a broader USD 150 million cost reduction plan, impacting approximately 400 corporate positions.
Severance packages
The advance auto parts going out of business sale impacts employee compensation through carefully structured severance arrangements. Benefits for full-time employees typically activate after 30 days of employment, with severance packages varying based on:
- Position level and years of service
- Healthcare benefit extensions
- Stock award considerations
- Outplacement assistance
Therefore, the company maintains its commitment to employee support through various life stages, offering benefits like paid maternity leave, 401(k) retirement savings with company match, and basic life insurance. The advance auto parts going out of business restructuring includes provisions for frontline staff through programs like Fuel the Frontline, which has granted 24,000 stock awards valued at over USD 70 million.
Alternatively, employees receiving severance must comply with specific terms, including non-compete clauses and restrictions on hiring former colleagues. The company’s approach to severance aligns with federal WARN Act requirements, mandating at least 60 days’ notice for mass layoffs.
Future of Auto Parts Retail Industry
The automotive parts retail landscape faces unprecedented shifts as digital commerce reshapes traditional business models. The global online automotive aftermarket is projected to reach USD 140 billion by 2027, marking a fundamental transformation in how consumers purchase auto parts.
Online vs brick-and-mortar competition
The digital revolution has dramatically altered consumer behavior, with nine out of ten shoppers now conducting online research before purchasing auto parts. Amazon has secured a 12.1% share of consumer spending on car parts in Q4 2023, primarily due to their vast selection and competitive pricing.
Rather than succumbing to online pressure, traditional retailers have developed unique advantages. Brick-and-mortar stores maintain their edge through:
- Specialized staff training for detailed automotive questions
- Immediate parts availability for emergency repairs
- In-person technical assistance and diagnostics
- Strong commercial customer relationships
Whether advance auto parts going out of business impacts the broader industry, online marketplaces continue gaining momentum. eBay reports double-digit conversion increases on auto parts listings, altogether reshaping the competitive landscape. The advance auto parts going out of business sale reflects broader industry pressures as traditional retailers adapt to e-commerce competition.
Industry consolidation trends
The automotive sector witnessed 131 reported deals in 2024, marking a 16% year-over-year increase. Generally, this surge in M&A activity stems from several factors:
First, suppliers face mounting pressure to invest in new technologies while maintaining profitability. The advance auto parts going out of business locations closures exemplify this industry-wide challenge. Soon, the sector anticipates increased consolidation as companies seek economies of scale.
Is advance auto parts going out of business a sign of broader industry changes? Overall, the automotive aftermarket sees significant restructuring. Major developments include:
- Honda-Nissan merger discussions
- Continental AG’s automotive business spin-off
- Dana’s planned divestiture of Off Highway operations
- ABC Technologies’ acquisition of TI Fluid Systems for USD 2.2 billion
The advance auto parts going out of business strategy aligns with industry-wide adaptation to changing market dynamics. The global connected car market is projected to reach USD 121 billion by 2025, primarily driven by technological advancement and changing consumer preferences.
The automotive aftermarket’s future hinges on adapting to electrification trends, with 56 million pure electric vehicles expected on roads globally by year-end. Unless retailers evolve their service offerings, they risk losing market share to more technologically advanced competitors. The global vehicle fleet is projected to expand to 1.7 billion light vehicles by 2033, creating opportunities for retailers who successfully navigate these changes.
Advance Auto Parts Going Out Of Business Frequently Asked Questions
Is advance auto parts going out of business sale?
No, Advance Auto Parts is not going completely out of business. However, they are conducting a liquidation sale at the locations that are closing as part of their restructuring process. These stores are offering discounts on remaining inventory, with some stores providing 15% off on future purchases. The sale is limited to the 523 corporate stores and 204 independently operated locations that are being closed.
Is advance auto parts going out of business?
No, Advance Auto Parts is not going out of business, but the company is undergoing significant restructuring. This includes the closure of 700 locations, the sale of its Worldpac subsidiary for $1.5 billion, and efforts to streamline operations. Despite these changes, the company continues to operate and is focusing on reducing costs and optimizing its retail presence.
Is advance auto parts going out of business locations?
Yes, Advance Auto Parts is closing several locations as part of its restructuring plan. Over 700 locations, including 523 corporate-owned stores and 204 independent locations, will be shut down. The company is also exiting from the West Coast market, with all 139 California locations slated for closure. The closures will be phased, extending through mid-2025.
Is Advance Auto in financial trouble?
Advance Auto Parts is downsizing its operations in response to mounting financial challenges. The company announced plans to close 523 corporate stores, four distribution centers, and withdraw from 204 independent locations by mid-2025. The restructuring comes after a disappointing third-quarter earnings report.
How will the Advance Auto Parts closures affect my local store?
The closures will primarily affect specific regions, with a significant focus on the West Coast, including the complete shutdown of 139 locations in California. Other areas impacted include Michigan, Indiana, Arizona, Florida, and Texas. However, not all stores are closing, and the remaining stores will continue to operate. Check with your local store for specific information regarding closure or operational changes.
How are the Advance Auto Parts store closures affecting employees?
Employees at the impacted stores will face layoffs, with severance packages provided based on tenure and position. The company is offering outplacement assistance, healthcare benefits, stock awards, and other support during the transition period. Some employees may also be relocated to different positions or market hubs as part of the restructuring efforts.