Advance Auto Parts announced today that they are leasing the retail space of 109 Pep Boys stores in California, for conversion into Advance Auto Parts stores in the next 9-12 months. The agreement between Advance and Pep Boys, which was signed earlier this month, does not include any Pep Boys Service Centers.
In a statement, Brian Kaner, Pep Boys CEO, said, “The agreement announced today only reinforces Pep Boys Service position as a leading repair and maintenance provider for consumers and fast-growing fleets on the West Coast. The agreement this year will provide us with an opportunity to refresh our Service Center locations and reinvest in the market to meet emerging customer needs, particularly as demand for electric vehicle service grows in the region.”
Advance stated that this move was important strategically, as they grow their chain nationally into one of the largest markets. As of January 2, Advance operated 4,806 stores, plus another 170 Worldpac branches in the U.S., Canada, Puerto Rico, and the U.S. Virgin Islands. They also stock 1,277 independently-owned Carquest stores in these same locations, in addition to Mexico, Grand Cayman, the Bahamas, Turks and Caicos, and the British Virgin Islands.
Separately, the National Retail Federation (NRF) forecasted retail sales growth between 6.5 – 8.2 percent to more than $4.33 trillion in 2021 as more of the U.S. population is vaccinated, and the economy reopens. “We are very optimistic that healthy consumer fundamentals, pent-up demand and widespread distribution of the vaccine will generate increased economic growth, retail sales and consumer spending,” said Matthew Shay, NRF president/CEO.
Early results show that retail sales in 2020 grew 6.7 percent to $4.06 trillion, which included intense pandemic disruption with online up, and brick-and-mortar stores down. Analysts at Bank of America last month selected Advance as one of four retailers they found attractive, issuing this statement: “The majority of AAP’s customers are professional auto repair shops, which were significantly hindered by the pandemic. With the pro auto service channel now in recovery, we think AAP is poised to benefit, as a recovery story with a multi-year margin growth opportunity.”
[Images: Advance Auto, Pep Boys]