According to a report out of The Register-Guard of Eugene, Ore., new/used car dealer and body shop consolidator Lithia Motors is pursuing a major restructuring, including selling 10 to 15 stores, due to lower sales.
“As the economic environment has worsened, we have taken a comprehensive look at our business and determined how it can be right-sized to achieve our profit margin and growth objectives for the long term,” Chief Executive Sid DeBoer said in a statement.
Lithia Motors, Inc. owns 17 collision repair facilities and also sells 28 brands of new and all brands of used vehicles at 110 stores located in 46 markets within 15 states.
Robert Sacks, Lithia’s director of community relations, could not say yet whether any of the body shops will go up for sale.
In addition to shedding 10 to 15 stores, Lithia said that, as part of its restructuring, it’s also postponing acquisitions until prices drop further.
Lithia also is accelerating a program of cost cuts because of reduced sales. In addition to $6 million in annualized cuts announced at the end of April, Lithia said it plans further cost reductions, including staff cuts, that will save an additional $1 million per month for a total of $18 million annualized. The company said it already has begun implementing the cuts, which should be completed within the next 90 days.
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