Raleigh-based Advance Auto Parts to close more than 700 stores, seeks financial rebound
Advance Auto Parts, one of Raleigh’s two Fortune 500 companies, announced it will close hundreds of stores across North America as it works to stop an ongoing financial slump.
The decision affects 731 locations, including around 10% of Advance Auto’s corporate stores and 20% of its independently owned locations. Over the next few months, the company will leave entire markets in Western states and reduce its footprint in the eastern United States.
During an earnings call Thursday, Advance Auto CEO Shane O’Kelly said profitability was a key metric driving which locations would remain open. Additional changes, O’Kelly said, will involved standardizing store models and opening dozens of new locations “in higher-density markets.”
“We’re willing to do the things that we need to do to be successful,” he said.
Advance Auto Parts currently operates 4,781 stores, most in the U.S. It relocated from Roanoke, Virginia, to Raleigh in 2018 after North Carolina and local governments offered the company a combined $12 million in economic incentives. As part of the deal, the maker of aftermarket auto parts pledged to create 435 new jobs at its new corporate home.
The company ended 2021 strong, with its stock hitting an all-time high at $240 a share. The next year, Advance Auto employed more than 700 people at its headquarters on Six Forks Road in Raleigh’s North Hills neighborhood. For a time, it was Raleigh’s only Fortune 500 company (First Citizens Bank debuted on the list of largest U.S. companies earlier this year).
Advance Auto has since faced headwinds amid weaker sales. In June 2022, Advance Auto asked North Carolina to terminate its 2018 Community Economic Development Agreement, citing “changes in corporate work arrangements” stemming from the COVID-19 pandemic.
In November 2023, Advance Auto laid off around 400 positions, including roles at its Raleigh headquarters. “We are moving forward with a sense of urgency to help stabilize the company and return to profitable growth,” O’Kelly, who became CEO in August 2023, said at the time.
On Thursday, he acknowledged upcoming store closures will lead to more job losses.
“I don’t want to lose sight of that,” O’Kelly said. “Any time that you’re making these moves and team members now don’t get to continue the journey with the company, nobody feels good about that.”
Advance Auto has continued to face demand challenges in 2024. As of Thursday, shares were selling at $42, down more than 30% since the start of the year.
This story was originally published November 14, 2024 at 4:13 PM.
