Advance Auto Parts to Shut 700+ Stores Amid Struggles

According to CNN, Advance Auto Parts (AAP), a nearly 100-year-old car parts retailer with around 5K stores, announced it will shutter over 700 locations to address persistent financial woes.

Closing Up Shop

The company has been grappling with declining sales, rising costs, and a shifting consumer landscape.

This decision follows the sale of its Worldpac subsidiary for $1.5B earlier this year, which was part of its effort to streamline operations and return to profitability.

Missed Earnings

In its latest earnings report, Advance Auto Parts failed to meet analysts’ expectations, causing its stock to drop nearly 5% in premarket trading. 

For the second quarter in a row, the company has revised its full-year outlook downward, citing economic uncertainty and waning consumer spending.

“Consumers continue to feel the weight of an uncertain macroeconomic climate,” the company said.

Retail’s Broader Decline

Advance Auto Parts’ struggles are part of a larger trend in retail. Many chains are closing locations as consumer spending declines, driven by:

• Higher prices: Inflation has pushed prices beyond what many consumers can afford.
• Rising interest rates: Increased borrowing costs limit purchases of big-ticket items like cars.
• Post-pandemic slowdown: The retail boom of 2021 and 2022 has faded, leaving companies to adjust to lower demand.

According to Coresight Research, 6.2K store closures were announced in 2024, surpassing last year’s total of 5.6K.

Looking Ahead

While Advance Auto Parts did not release a full list of affected stores, the closures will impact locations across its footprint. 

The company’s turnaround plan aims to stabilize operations, but with consumers pulling back on discretionary spending, challenges remain for both Advance Auto Parts and the broader retail sector.