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Auto giant passes a milestone as it hunts for a new CEO
by Rod Belcher
for Virginia Business
September 2007
Roanoke’s sole Fortune
500 company has turned 75 years old at a time it
is looking for a new CEO and adjusting to slower
overall sales growth.
Advance Auto Parts, founded in 1932 by Arthur Taubman, now has more than 3,000 stores in 40 states, as well as Puerto Rico and the Virgin Islands.
The company, which ranks 478th on the Fortune 500 list, has been looking for a new CEO since the abrupt resignation of Michael N. Coppola in May. He had been CEO since 2005. Company Chairman John Brouillard has served as interim CEO while the company conducts a nationwide search.
Advance is the second-largest
retailer of automotive aftermarket parts, accessories,
batteries and maintenance items in the U.S. behind
AutoZone Inc. The company also is one of the Roanoke
area’s top 10 employers. “We employ over 1,600 people in the region,” says
Shelly Whitaker, a company spokeswoman.
The company eliminated 75 jobs in the area as part of a recent cutback of 250 positions throughout the company. The move affected only 31 local employees because the other 44 positions were vacant.
Advance announced the job cuts among a list of adjustments it was making in reporting its second-quarter earnings. Sales for the quarter rose from to $1.17 billion from $1.11 billion the year before and earnings increased 8.5 percent, but comparable store sales, a widely used measurement of retail performance, increased only 1.3 percent.
CHANGES
AT ADVANCE AUTO PARTS |
1932: Arthur Taubman begins Advance Stores with
the purchase of a small chain of home and auto
supply stores in Roanoke and Lynchburg.
1970s: Under Nick Taubman, the company eliminates
home appliances to focus on auto parts. The company
name becomes Advance Auto.
1982: Advance Auto begins its Parts Delivered
Quickly (PDQ) system.
1985: Company name becomes Advance Auto Parts.
1998: Taubman family sells a majority interest
to the investment firm Freeman Spogli. Advance
Auto Parts merges with Western Auto Supply Co../Parts
America.
2001: Advance Auto Parts acquires Carport Auto
Parts and Discount Auto Parts and becomes a publicly
traded company.
2002: Company buys 55 Trak Auto Parts stores.
2003: Company acquires Kar Parts Auto Stores.
2005: Company acquires 19 Lappen Auto Parts
stores and 61 Autopart International stores.
Autopart International becomes an independent
subsidiary of Advance Auto Parts. |
In addition to reducing jobs, the company scaled back its plans for new stores and store relocations and is re-evaluating marketing and remodeling plans.
Advance has two distinct business
tracks — a “do-it-yourself” component catering to weekend mechanics and a “do-it-for-me” commercial track in which parts are sold to auto professionals working on customers’ cars.
The commercial side of the business is experiencing the most growth, with sales up 5.8 percent in the second quarter at a time when the do-it-yourself segment was virtually flat.
The recent developments make up the latest chapter in the history of Advance, which started with two Roanoke stores and one in Lynchburg. Initially, the company served as a general merchandiser, selling many products, including automotive parts and accessories.
In the 1970s, Nicholas Taubman,
the founder’s son, narrowed the company’s
focus to become an automotive aftermarket specialty
retailer. Taubman today is U.S. ambassador of Romania.
Advance has witnessed its most
impressive growth in the last 15 to 20 years. The
company spent most of that period acquiring competitors. “The majority of our expansions and growth is targeted towards Texas, Chicago, Oklahoma and Wisconsin in the coming years,” says
Whitaker.
The company plans to open 190 stores this year, down from its initial goal of 200. It opened 113 stores through the first half of the year.
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