Parts chain acquisition fits into Advance Auto's '2010' strategy

In a marketplace like Boston, a good location for a parts store is hard to come by. That?s why Advance Auto Parts jumped at the chance to acquire Lappen Auto Supply Co.?s auto parts division in the greater Boston area.

In a marketplace like Boston, a good location for a parts store is hard to come by. That’s why Advance Auto Parts jumped at the chance to acquire Lappen Auto Supply Co.’s auto parts division in the greater Boston area.

The acquisition includes 19 Lappen’s Discount Auto Parts stores.

“Growing our store organically is still our top priority,” says Adam Bergman, vice president of investor and media relations for Advance, the country’s second largest automotive retailer.

With this purchase, Advance expects to convert the Lappen’s stores to its 2010 format, which Bergman describes as a complete remodeling from inside the store to the parking lot, including new colors and an improved store layout.

About half of Advance’s more than 2,500 stores have either opened with the 2010 layout or have been converted as such.

Bergman also attributes the 2010 format with much of the retail chain’s success in the face of a stagnant year for many aftermarket companies.

“We’re giving the customers a reason to prefer our stores and come shop with us,” he says. “Whether customers prefer a bright, new, fresh store as opposed to our aging one. I think that’s part of the answer.”

A well rounded ‘tool kit’

Beyond the aesthetics, Advance also offers educational brochures, video clinics, how-to information on its website and a successful national advertising campaign, among other reasons Bergman offers for the company’s charted growth.

Second quarter numbers were not available at press time, but Advance posted 12-percent year-over-year revenue growth in the first quarter of 2005, far above the profits of many comparable aftermarket retailers. The company attributes its net sales increase to a 9-percent comparable store sales increase along with new store contributions.

The company’s customer base is about  20-percent commercial, 80-percent retail.

Education is an important device in the Advance “tool kit,” says Bergman, attempting to dispel what he sees as a common DIY myth.

“Frankly, the vehicles today are not much more difficult [to work on] than they were in the past,” he adds. “The basic mechanics of a vehicle are similar to what they were in the Model T: oil filters and air filters, starters, alternators, batteries, hoses and belts. About the only major change that’s occurred is fuel injection.”

Advance Auto, which announced the acquisition in July, projects its new store count this year at the higher end of the estimated 150 to 175 new stores.

Lappen Auto Supply will continue to operate its garage equipment operations, according to CEO Ed Lappen. Because the company is privately held, the terms and price of the sale were not disclosed.

About the Author

Chris Miller

Chris Miller holds a BS in plant and soil science from the University of Delaware and a MS from Michigan State University. He was an assistant superintendent at Franklin Hills CC in Michigan, then worked for Aquatrols for five years, until the end of 2000, as senior research agronomist, responsible for overseeing and organizing turfgrass related research involving the company’s product line as well as new products. He now teaches computer programming at Computer Learning Centers, Inc. in Cherry Hill, NJ.
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