Rush Enterprises to Close 13 Dealerships to Consolidate, Cut Expenses
Commercial truck dealer Rush Enterprises Inc. said April 6 it plans to close 13 dealerships that sell Navistar International Corp.’s International truck brand during the first half of 2016. The decision as part of a consolidation to reduce expenses while still maintaining service in the regions.
The company said those Rush Truck Centers it intends to close contributed about $55 million in revenue in 2015, and it expects to retain about 55% of the revenue from these locations through consolidation into other nearby locations.
Also, the company said it expected the closures will result in annual expense reductions of approximately $11 million.
“Both the expense savings and revenue losses are largely incorporated in prior guidance comments, so to some extent this is just the company executing on its plan,” BB&T analyst Rhem Wood wrote in a report to investors.
“It's never easy to make the decision to close a Rush Truck Center,” W.M. “Rusty” Rush, chairman and CEO of Rush Enterprises, said in a statement. “However, as we acquired dealership groups across the country in recent years, we acquired a number of small dealerships located in close proximity to one another. Many of these dealerships have been in existence for a long time, but with changes in technology and, in certain cases, the local markets, there is no longer an economic justification for the affected dealerships to operate in such close proximity to our other dealerships.”
The company, which is the nation’s only publicly traded truck dealership, said the plan includes closing Rush Truck Centers in the following locations on May 1, 2016: Kankakee, Decatur, Ottawa, Mount Vernon and Grayslake, Illinois; Ontario, Oregon; Findlay, Ohio; and Statesville, North Carolina.
Rush Truck Centers formerly located in Brazil, Indiana, and Helper, Utah, were closed in the first quarter of 2016.
Additionally, it said that as a result of acquisitions, the company currently has two locations in both Augusta and Tifton, Georgia, which will be consolidated into one location in Augusta and one location in Tifton on June 1, 2016.
The company also consolidated its Peterbilt location in Alice, Texas, into its newly constructed Corpus Christi, Texas, location in the first quarter of 2016. Peterbilt Motor Co., is a brand of Paccar Inc.
“Importantly, we believe these expense reductions will be achieved without any significant reduction in our ability to service customers in our areas of responsibility,” Rush said.
He said he was hopeful many of the employees at the affected centers would move to the company’s other dealerships.
