Luce Zielinski, public relations manager for Penske, says the bulk of the 300 employees affected by the closings will be placed on other centers.
"Those that are not transferred are at least offered severance packages, as opposed to Kmart employees," Zielinski tells GlobeSt.com.
Kmart closed 284 under-performing stores as part of its initial Chapter 11 financial objectives review. The stores included 271 Kmart discount stores and 12 Kmart Supercenter retail outlets in 40 states, and one store in Puerto Rico. More than 22,000 lower-level employees were let go, without severance pay.
"We expect the impact of these closings on our business will be minimal," says Penske Auto Centers president and CEO Jim Wheat. "I'm pleased to say that the remaining 562 auto centers are strong and performing well."
The closures were spread across the US, with the most in Texas (12), Illinois (seven) and Michigan (five).
Zielinski says the company has made significant progress since it was acquired from Kmart in November 1995 for about $112 million. Kmart owns a 22% stake in the stores.
"Last year when the economy was so bad, we opened up three stores," Zielinski says. "Because of strong marketing and brand awareness, we're fairly comfortable with the company's status."
She says customers' products and service warranties will be honored by any Penske auto center nationwide. A toll-free number -- 1-877-99-PENSKE – is available for customers to locate an auto center nearest them. Direct mailings announcing the closings and where other stores are located have been sent out.
"We have banners with the 877 number up at the closed stores," Zielinski says.
The company opened its first non-Kmart attached store in November in Ft. Myers, FL in a former Montgomery Wards auto center building. Zielinski says the company has not made any plans to take the free-standing store concept nationwide.
"We're always looking to grow our business, and to take advantage of closed facilities and other available sites only makes sense," she says.
The company is a subsidiary of Penske Corp. of Detroit.
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