Advance Auto Parts, one of the two Fortune 500 companies based in Raleigh, has announced plans to close hundreds of its stores across North America in an effort to address a persistent financial downturn.
This decision will impact 731 locations, which includes approximately 10% of the company's corporate stores and 20% of its independently owned outlets. Over the coming months, the company will exit entire markets in the Western states and scale back its presence in the Eastern United States.
During a recent earnings call, CEO Shane O’Kelly emphasized that profitability was a crucial factor in determining which locations would remain operational. He also mentioned that the company would standardize store models and open several new locations in areas with higher population density.
“We are prepared to take the necessary steps to ensure our success,” he stated.
Currently, Advance Auto Parts operates 4,781 stores, primarily in the U.S. The company moved its headquarters from Roanoke, Virginia, to Raleigh in 2018, following a combined $12 million in economic incentives from North Carolina and local governments. As part of this agreement, Advance Auto committed to creating 435 new jobs at its new corporate location.
The company concluded 2021 on a high note, with its stock reaching an all-time peak of $240 per share. By the following year, Advance Auto had over 700 employees at its headquarters on Six Forks Road in Raleigh’s North Hills area. For a period, it was the only Fortune 500 company in Raleigh until First Citizens Bank joined the list earlier this year.
However, Advance Auto has encountered challenges due to declining sales. In June 2022, the company requested North Carolina to terminate its 2018 Community Economic Development Agreement, citing “changes in corporate work arrangements” resulting from the COVID-19 pandemic.
In November 2023, Advance Auto eliminated approximately 400 positions, including some at its headquarters in Raleigh. O’Kelly, who took over as CEO in August 2023, stated, “We are moving forward with a sense of urgency to help stabilize the company and return to profitable growth.”
On Thursday, he acknowledged that forthcoming store closures would result in additional job losses.
“I don’t want to lose sight of that,” O’Kelly remarked. “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 encounter demand challenges in 2024. As of Thursday, shares were trading at $42, reflecting a decline of over 30% since the beginning of the year.