Advance Auto Parts Announces 700 Store Closures Amid Declining Demand and Strategic Restructuring

Executive Summary:

Advance Auto Parts plans to close 700 locations, including 500 corporate-owned stores, 200 independently owned stores, and four distribution centers, by mid-2025 in response to declining customer demand for auto repair products. This decision follows a comprehensive review of the company rsquo;s operational productivity and its third-quarter 2024 financial performance, which reported a $6 million loss and a second consecutive downward revision of its full-year revenue outlook.

In addition to closures, the company aims to standardize its store operating model, improve labor productivity, and accelerate the opening of new stores. Supply chain operations will be restructured, consolidating distribution into 13 large facilities by 2026, opening 60 market hubs by mid-2027, and optimizing transportation routes to lower costs.

CEO Shane O rsquo;Kelly emphasized that these changes are part of a broader three-year financial plan to enhance operational efficiency and shareholder value. While the company has faced challenges with sluggish sales in 2024, these strategic shifts aim to improve productivity and strengthen its market position moving forward.