Advance Auto Parts, a leading auto parts supplier, has announced plans to close over 700 locations, including more than 500 corporate stores and four distribution centers, as part of a major restructuring effort.

The decision comes amid sluggish demand for vehicle parts and disappointing financial results, with the company reporting a loss in its third-quarter earnings.

The closure of these stores, which will occur by the middle of 2025, is part of Advance Auto Parts’ broader efforts to revive its struggling business. In its third-quarter report released on Thursday, the company posted an adjusted loss of 4 cents per share, a significant improvement compared to the $1.19 loss reported during the same period last year.

Despite an 11% increase in gross profit, the company has been facing a drop in vehicle repair demand, prompting the decision to close stores and reduce its workforce.

During a post-earnings call, executives explained that the company’s financial challenges were also exacerbated by external factors, including hurricanes and a CrowdStrike outage, which contributed to the decline in profits. As a result, the company is planning a new three-year financial strategy to improve its performance.

Shane O’Kelly, president and CEO of Advance Auto Parts, commented on the company’s outlook, stating, “We are pleased to have made progress on our strategic actions, including the completion of the sale of Worldpac and a comprehensive operational productivity review of our business. We are charting a clear path forward and introducing a new three-year financial plan, with a focus on executing core retail fundamentals to improve the productivity of all our assets and create shareholder value.”

This restructuring follows the sale of Worldpac, a leading distributor of automotive parts, for nearly $1.5 billion on November 1, 2024. The sale of Worldpac is part of the company’s broader strategy to streamline operations and refocus on its core retail business.

Advance Auto Parts, headquartered in Raleigh, North Carolina, operates over 4,700 stores across the U.S., Canada, Puerto Rico, the U.S. Virgin Islands, and Mexico. The company also serves 1,125 independently owned Carquest-branded stores. The closures will affect both corporate and independent locations, with 523 corporate stores and 204 independent locations slated for shutdown.

While Advance Auto Parts has not disclosed which specific locations will be closing, the company has confirmed the closure of four distribution centers as part of the plan. The move will result in a reduction of jobs, though the exact number of layoffs has not been specified.

The company’s decision to scale back operations comes as fewer consumers are opting to repair their vehicles, a trend that has put pressure on the auto parts retailer. The upcoming closures are expected to help the company manage its costs and improve its overall productivity.

As Advance Auto Parts looks to navigate these financial challenges, it is implementing a new strategic plan aimed at improving its retail operations and ensuring long-term sustainability. The company’s ability to adapt to changing consumer habits and improve profitability will be critical to its recovery in the coming years.

With these closures, Advance Auto Parts joins other retailers making difficult decisions in the wake of shifting market demands and economic pressures. While the company aims to streamline operations and improve its financial standing, many are left wondering how these changes will impact both the auto parts industry and the communities where these stores have been staples for years.

How do you think the closure of over 700 Advance Auto Parts locations will impact the automotive repair industry and local communities?