A MAJOR auto parts retail chain that shuttered 700 locations in the US has made a stunning turnaround.
Advance Auto Parts CEO Shane O’Kelly opened up about an encouraging business move after suffering through hundreds of store closures.
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Advanced Auto Parts is doubling down on a major expansion push that promises faster service with same-day delivery and a bigger inventory for customers.
The company is focused on selling auto parts and strengthening its core business after a rocky stretch.
This year, the North Carolina-based company opened six new stores in Florida, New Jersey, Tennessee, and Virginia.
Another 30 locations are set to open this year.
More stores are coming to Illinois, Maryland, Ohio, and Wisconsin in the next few months, with a focus on the Midwest for larger expansions.
Known as a leading American retailer of automotive parts and accessories, it sells car batteries, motor oil, headlights and related products, serving both professionals and DIY customers.
“Our team members are committed to providing the right parts and the right service for our PRO and DIY customers in their communities,” said O’Kelly.
This growth comes on the heels of a brutal 2024 restructuring that saw 523 corporate stores, 204 independent locations, and four distribution centers shut down for good.
The cuts were part of a strategic overhaul to steady the business after a tough financial run, including a $6 million loss in Q3 2024.
According to District Attorney Mike Hestrin, a judge in Riverside County, California, ordered the restitution after the firm was accused of violating laws related to the transfer of registration and ownership of used cars.
In California, used car dealers must submit an application to the Department of Motor Vehicles to transfer registration to a buyer within 30 days of a car’s sale.
That same 30-day deadline applies to the certificate of ownership – commonly known as a “pink slip.”
The financial turbulence forced the company to sell its Worldpac distribution business for $1.5 billion and slash its annual outlook twice in a row.
Even after raking in $2 billion in Q4 sales in 2024, revenue still dipped 0.9% year-over-year, capping off a 1.2% full-year decline to $9.1 billion.
US braces for ‘45,000 store closures’
Some 45,000 bricks-and-mortar stores could close in the next five years, experts have warned.
Several major retailers have announced store closures or gone out of business altogether in recent years.
In 2023, chains such as Foot Locker announced plans to close up to 400 outlets by 2026.
While, other well-known retailers like Tuesday Morning and Mitchell Gold + Bob Williams filed for bankruptcy in 2023.
Bed Bath & Beyond has closed all of its brick-and-mortar stores and is now an online-only retailer.
The most affected retailers have been clothing, consumer electronics, sporting goods, hobby, book, music, and home furnishing stores since the start of 2019.
UBS has predicted the total number of retail stores will drop by 45k from 958k to 913k.
Despite that, the report says that certain stores should thrive while others decline.
It said retailers such as Walmart, Costco, Home Depot, and Target, could be among the winners.
But leadership isn’t backing down.
“We ended 2024 with a healthy balance sheet and strong liquidity to navigate our turnaround,” O’Kelly said in a February report.
“The team is acutely focused on execution and driving stronger accountability.”
Advanced Auto Parts is setting its sights on a 7% adjusted operating margin by 2027 and expects $2.5 billion in Q1 2025 sales, though it’s bracing for another dip in comparable sales.
The retailer isn’t alone in its struggle.
Over 7,300 US stores shut their doors in 2024, hit hard by inflation and the unstoppable rise of online shopping.
Macy’s is axing 66 stores in a major restructuring, while Joann and Party City didn’t survive bankruptcy.
Forever 21 is calling it quits too, planning a full US exit this year.
Even with industry-wide shakeups, Advance Auto Parts still boasts 4,000+ locations worldwide, and it’s betting big on this next chapter.
