AutoZone Unveils Business Rescue Plan Amid Potential Branch Closures

AutoZone, South Africa’s leading privately owned auto parts retailer, has announced a Business Rescue Plan aimed at navigating through its recent financial turbulence. The retailer, which entered business rescue in early July due to a deadlock with its primary credit provider, ABSA, hopes the plan will stabilize its future.

Plan Highlights

The Business Rescue Plan includes several structural changes, including the proposed closure of nine underperforming branches. This move is expected to impact 46 employees. Currently, AutoZone operates 214 wholly-owned branches and 33 member-owned branches across Southern Africa.

Creditors Meeting

In compliance with section 151(1) of the Companies Act, AutoZone will convene a meeting with affected creditors and other stakeholders on Wednesday, September 11, at midday. This meeting will be crucial in discussing the proposed changes and ensuring all parties have an opportunity to voice their concerns.

Union Involvement

The Motor Industry Staff Association (MISA) has pledged to remain actively involved in the business rescue process. MISA aims to safeguard the interests of its members who may be affected by the proposed job losses. MISA’s chief executive, Martlé Keyter, acknowledged the severe challenges facing the retail motor industry, exacerbated by record high interest rates and a rising cost of living.

Industry Impact

The financial strain on AutoZone is part of a broader issue affecting the auto industry, with new vehicle sales dropping by 4.9% year-on-year in August. This decline reflects consumers’ reluctance to purchase due to high interest rates and economic uncertainty, as they await the anticipated start of interest rate reductions.