Checker owner lays off 160, will close 40 stores, trim planned openings
September 7, 2007
The Phoenix-based owner of Checker Auto Parts said it will cut 160 employees immediately and close 40 stores in fiscal 2008 to strengthen business.
CSK Auto also said it would be more "disciplined" in opening new stores, and it reduced planned openings for fiscal 2007 from 64 to 48, with just 14 planned for 2008.
The job cuts from its staff of about 9,800 do not include those who will lose jobs when stores close, said Brenda Bonn, investor-relations manager.
"We will offer those people positions in nearby stores," Bonn said.
The company has 1,334 stores in 22 states. They include Kragen stores in California, Schuck's Auto Supply in the Pacific Northwest and Murray's Discount Auto Stores in the Midwest.
Bonn would not say when employees at those stores slated for closure will be notified.
The company determines which stores to close based on market saturation and profitability, and it is not changing the criteria, Bonn said. But new President and CEO Lawrence Mondry is being more selective about expansion.
"CSK is a fundamentally sound company that is the market leader in most of its major markets, with a solid second position in virtually all of its remaining markets," Mondry said in a news release.
"These initial steps . . . will be difficult, but they are critical to setting CSK Auto on the right path for the future," Mondry said.
The closures and cuts will help save the company $7.6 million this year and $34 million in 2008, CSK said.
Investors seemed to like the news. Shares opened slightly higher after the Wednesday night announcement and rose to $13.17 Thursday, a 7 percent gain.
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