Auto Parts Chain to Close 139 Stores Statewide, Adding to California’s Commercial Real Estate Challenges
Plans to Shut 725 Stores Across the U.S.
Raleigh, N.C.-based Advance Auto Parts is set to close 139 retail locations throughout California, along with four West Coast distribution centers. This move is part of the company’s plan to shut 725 stores across the U.S. in an effort to stem losses.
Challenges in Logistics
The company’s struggles with logistics have been a major issue, with its relative lack of scale of operations in California standing out for inefficiencies. According to industry analyst Bret Jordan of Jeffries, many Advance Auto Parts stores receive deliveries from the chain’s warehouses once a week, while some competitors receive shipments of stock daily.
Impact on California’s Commercial Real Estate Market
The cutback in stores will have a significant impact on California’s commercial real estate market. The pending closures will affect about 70 locations in the five-county area. The retail sector is currently undergoing a shift, with trends moving away from regional malls but towards centers anchored by so-called "daily needs" tenants such as grocery stores and pharmacies.
What’s Next for Advance Auto Parts?
The company’s decision to exit California marks a significant change for the retail landscape. As the company focuses on improving companywide profitability, it will be interesting to see how this move affects the commercial real estate market in California.
Frequently Asked Questions
Q: How many stores will Advance Auto Parts be closing in California?
A: The company will be closing 139 retail locations throughout California.
Q: How many distribution centers will be affected?
A: Four West Coast distribution centers will also be closing as part of the company’s restructuring plan.
Q: What is the reason behind Advance Auto Parts’ decision to close these locations?
A: The company is attempting to stem losses by cutting out underperforming regions, including California, where it lacks scale and density to build an effective supply chain.
Q: How will this affect California’s commercial real estate market?
A: The closure of 139 stores will add to the challenges facing California’s commercial real estate market, particularly in the retail sector, which is shifting towards centers anchored by daily needs tenants.
