BOUCHERVILLE, Que. - Uni-Select Inc. has announced a restructuring of its U.S. operations that will see more than 600 jobs eliminated as dozens of stores and distribution centres are closed or sold, saving the Quebec-based auto-parts distributor US$30 million a year.
The company announced Thursday that it will cut 400 more positions on top of 214 already eliminated in the reorganization.
So far Uni-Select has shut 11 of the 48 stores it plans to close overall and one of 12 distribution centres slated for the chopping block. The stores provide parts to repair shops.
It plans to close an additional 30 stores and a second distribution centre in the third quarter, with the rest of the reorganization to be completed by late 2014.
The moves are a result of a review of strategic alternatives designed to significantly improve the U.S. segment's profitability by eliminating redundancies.
The changes are in addition to a network optimization plan launched last August that realized US$20 million in annual cost savings. However, those benefits were offset by lower sales.
Uni-Select's presence in the United States has grown over the past decade through more than 70 acquisitions.
About US$10 million of the annual cost savings will be realized this year, an additional US$15 million in 2014 and the remaining US$5 million in 2015.
The changes are expected to reduce annual sales by US$70 million and result in US$45 million in one-time costs.
Restructuring charges totalling about US$36 million will be recorded in the second quarter of its fiscal year, with the rest being booked as they are incurred. The charges will result in a cash outlay of US$13 million, offset by a US$40 million reduction in inventory.