Advance Auto already closing CA stores?

[ClownLoach]

Must have happened before I got here, and that would be before they got most of these Pep Boys units converted.

I thought the Reno Car Quest (Rock Blvd.) had Advance branding for a brief time period around 2018-2019 range, but either I imagined it or it never did.

So I wonder how long this closed store actually had Advance branding.

I think the general lack of expansion effort in CA beyond the Pep Boys sites speaks volumes. It doesn't feel like they are taking the CA market seriously to me. They needed to expand further beyond the Pep Boys sites, quickly. There is plenty of available real estate and hundreds more 99 Only/Rite Aid/Walgreens vacancies coming/already available.

I never went into this Advance Auto but it appeared to have been set up with the same fixtures and prototype seen in the Pep Boys conversions. Most of the Carquest stores have more of a independent dealer type of look, not as slick of an appearance.

Pep Boys didn't have great locations in the first place. Many of the California stores were standalone or in subpar strip malls.

I cannot imagine that anyone can provide a superior experience for the customer or professional mechanic than either AutoZone or O'Reilly at this point. Their superior inventory management, logistics and order fulfillment capabilities are amongst the very best in all of retail. They have more than enough locations throughout California and vastly outnumber Advance. Furthermore, Advance seems to have completely stopped marketing here. For a short time they had some billboards and TV commercials that explicitly stated over 100 stores now open throughout California. But the only commercials I see now are national ones for Diehard batteries and no mention of the California introduction. Advance had national commercials for years but no stores here and I'm sure there are many people who had learned to just ignore the ads. But now that they are here I don't believe many customers are aware of it, nor do I see why they would be dissatisfied with O'Reilly or AutoZone and looking for another option.

AutoZone is approaching 700 stores in California, O'Reilly just a hair under 600. Advance has about 120. They're outnumbered 10 to 1. Probably time to cash out and sell off these sites to AutoZone or O'Reilly then get out of the state. There is no way they're going to get another 500+ locations opened with today's astronomically high commercial rents to become competitive, nor does the market need that many stores.

[storewanderer]

IF Advance is serious they now have opportunities to get hundreds of additional stores in CA quickly. These 99 Only closures present a lot of potential great real estate for them. They don't need the entire space but they could use part of the space.

Rite Aid closures to a lesser extent but that may not work out as well.

As you point out the advertising strategy has changed and it doesn't make sense.

I don't see much of a future for them in CA.

[ClownLoach]

IF Advance is serious they now have opportunities to get hundreds of additional stores in CA quickly. These 99 Only closures present a lot of potential great real estate for them. They don't need the entire space but they could use part of the space.

Rite Aid closures to a lesser extent but that may not work out as well.

As you point out the advertising strategy has changed and it doesn't make sense.

I don't see much of a future for them in CA.

Those are way too big for them. Their best bet is to hook their wagon to whoever goes after these 99 locations and sign up to open as a sub tenant in the larger boxes if there is room. They seem oversized even at 13K, as a customer I do not see what they offer that AutoZone and O'Reilly don't as the customer space seems to be the same. That indicates to me they just sit on more inventory, less turns, which probably is why they can't afford to expand. I suspect they lack the incredible logistics of AutoZone and especially O'Reilly which can sell the last of an item at closing, and it will be both back in stock and on the shelf at opening the next day. No need to keep a lot of inventory tied up at the store level which also means much less shrink. And both have large fleets trucking goods to mechanics shops all day long and can deliver the part needed in an hour or two if another store has it in stock within the same area. I don't think Advance has been able to add these capabilities as I see their branded vans sitting and collecting dust in the parking lot.

I just don't see them surviving in California at this rate without investing hundreds of millions to build out the chain and they are losing money each quarter. The longer they wait the more they lose here, and the more they lose the less viable the entire chain is. They did replace the CEO who signed up for this ill-fated California expansion, and I wonder how much longer the new guy is going to get away with reporting horrific earnings while their competitors are killing it. I think they need to just cut their losses and close the California stores entirely and chalk it up to the incompetence of previous leadership that couldn't get the stores converted and opened in a reasonable time. Obviously there was no requirement to close for remodeling as we are hearing stories of small franchises similar to NAPA taking over these stores in overnight changes where they just swap out the cash registers and take over the inventory. This was a decision made by Advance and a bad one at that, they should have bought all the inventory and licensed the Pep Boys name to stay on the parts side until they could finish remodeling with the doors still open. Closing and liquidating these stores sent their few remaining customers packing to the competition, and I'm sure they have learned that the competition is superior on pricing, service, and selection. Advance will never regain that market share, the cost to acquire each customer is going to be too high and they can't afford to give away incentives to bring customers back.

[storewanderer]

Advance screwed up keeping some stores closed for many months also. I assume in the process they lost employees too.

They should not have closed but it seems like the Pep Boys agreement called for some kind of remodeling/construction of separate bathrooms or something... again they should have figured something out to not cause that disruption/space loss like go in 50/50 for a janitorial service or something.

It is too bad. Pep Boys was clearly struggling on the retail side but it seems like this Advance is doing worse.

I'd like to see competition for Auto Zone and O'Reilly but this doesn't seem to be it. O'Reilly is actually run a lot better than CSK who they took over was. One of those rare situations where the entity that did the acquiring was actually a stronger operator. CSK was a good idea but a poorly run mess. O'Reilly has much better control.