CarLotz Inc (NASDAQ:LOTZ) announced it will close 11 of its dealership stores, or “hubs” on June 21, 2022 (all hub closing activities to be completed by July 8, 2022) as part of a strategic review of the business. Moreover, three locations with executed leases will not be opened.
The closure is estimated to result in a 25%-30% workforce reduction, and reduce loss from operations by approximately $12-$13 million annually, assuming the company will be unable to sub-lease any locations. In case the company is able to sub-lease or assign the leases associated with the 11 hubs and the three unopened locations, it expects additional savings of $7.5-$8.5 million in occupancy costs per year.
According to Lev Peker, CEO of the company, the closures are a necessary step to help improve the company’s financial performance.