LOTZ - CarLotz shutters 50% of stores to cut workforce by 25-30%

CarLotz (NASDAQ:LOTZ) said Tuesday it closed 11 dealership stores (50% of its stores) as part of a strategic review, resulting in an estimated workforce reduction of 25-30%. Three locations with executed leases will not be opened. All hub closing activities for the 11 stores will be completed by Jul. 8. LOTZ expects the closures will reduce loss from operations by ~$12M-$13M on an annualized basis. This estimate assumes that LOTZ will be unable to sub-lease any locations. The firm is exploring sub-leasing or assigning the leases associated with the 11 hubs and three unopened locations locations to interested parties. If LOTZ is able to sub-lease or assign the leases, the firm expects additional savings of $7.5M-$8.5M in occupancy costs per year. LOTZ expects the closures will provide additional working capital of ~$10M as inventory is liquidated based on anticipated sale prices at the locations. This increase in liquidity will be

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CarLotz shutters 50% of stores, to cut workforce by 25-30%