Advance Auto Parts, one of the leading auto parts retailers in the United States, is set to close around 700 stores as part of its restructuring efforts, according to announcements made during the company's quarterly earnings call. The closures, which include both corporate and independently owned locations, form part of Advance's strategy to reposition itself for long-term success amid increasing competition and financial challenges.
During its earnings call held on Wednesday, CEO Shane O'Kelly reiterated the company's plans from the previous November to shut down approximately 500 corporate stores and 200 independent locations, along with four distribution centers by mid-2025. “During 2024, we initiated transformative actions to reposition Advance for long-term success and value creation,” O'Kelly stated, emphasizing the need for the company to consolidate its operations for sustainable growth.
The closures come as part of broader trends within the retail sector where chains are responding to underperformance and shifting consumer demands. Notably, 2025 has already seen significant closures across various industries. Competitors like Denny's, TGI Fridays, Macy's, and JCPenney have also announced reductions to their store counts. This wave of closings suggests significant shifts within consumer behavior and the economic pressures faced by traditional retailers.
Advance Auto Parts has made considerable efforts to stabilize its market presence, having opened 42 new stores against 40 closures during the last year, finishing with approximately 4,788 stores by year-end 2024. The upcoming closure plans, slated to begin imminently, will reshape the company's footprint significantly. The initial stores being closed have already been placed on the market by Hilco Real Estate Sales and include locations across several states.
States like Mississippi will feel this impact directly, as local economies adjust to the closures. The company noted around 20% of its Mississippi stores have already shut their doors. Specific locations, such as Jackson, Meridian, and Greenville, are now for sale, indicating the rapid changes underway. This effort highlights Advance's strategy to focus on consolidations and market hubs moving forward.
Advance Auto Parts enjoys the backing of over 4,700 locations throughout not only the U.S. but also Canada, Puerto Rico, and even parts of the Caribbean, supporting both corporate and independently operated Carquest-branded stores. While these closures are just one piece of the puzzle, they highlight the challenges faced by many retailers today.
For customers and employees alike, the effects of these closures may be far-reaching. Many local economies often rely on these auto parts retailers for employment and services related to vehicle maintenance. With the closures, employees will be heavily impacted, with reductions to headcount anticipated across all affected locations.
Advance Auto's corporate restructuring is not solely about downsizing. The company also plans to introduce larger distribution centers and expand their hubs across key markets, which they aim to complete by the end of the current decade. This expansion could potentially mitigate job losses from the closures by creating new roles within consolidated facilities. Advance aims to transform its operations to offer more relevant and effective services to its customer base.
The strategic approach to increase store openings amid closures suggests confidence from leadership about the company's future market strategies. The aggregate number of physical auto parts retailers is declining, but those remaining are adapting to new demands and technological advancements.
To check local store statuses, customers have been advised to utilize the store locator feature available on Advance Auto Parts' website, where they can find updated information on which locations remain open and which have been affected by the closures. The company is attempting to streamline operations around core offerings to maintain and generate value.
With uncertainty still looming around retail sales and consumer habits shifting, the future remains unpredictable. The efforts from Advance Auto Parts reflect broader changes across many sectors, where companies must continuously adapt to survive. The success of this transformation will be under scrutiny as the final closures of stores draw closer.
While the immediate impacts of the closures are clear, the long-term effects on the business model of Advance Auto Parts and the retail automotive industry will take longer to materialize. Only time will tell if this restructuring will lead to the projected improvement and solidify the company’s place within the market.