L.V. auto parts stores in merger

Tuesday, May 12, 1998 | 10:18 a.m.

MEMPHIS, Tenn. -- AutoZone Inc., the largest U.S. auto-parts retailer, agreed to buy closely held Chief Auto Parts Inc. for $280 million to expand in California and Nevada.

AutoZone said it will purchase the outstanding shares of Chief Auto Parts for about $75 million and assume about $205 million in debt. Dallas-based Chief Auto is the nation's sixth-largest auto-parts chain.

About 400 of Chief Auto's 556 stores are in California, where the retailer dominates the key Los Angeles market. Memphis-based AutoZone has just 12 stores in the state, which it entered last year.

The expansion into California runs parallel to a similar plan for Nevada. Chief operates 22 stores in Southern Nevada while AutoZone has six locations in the Las Vegas Valley.

"It took AutoZone 16 years to open our first 1,000 stores and just three years to open our next 1,000 stores," said John Adams, chairman and chief executive of AutoZone.

Chief Auto had sales of $464.7 million last year. AutoZone, with annual revenue of $2.7 billion, sells auto and light truck parts through 2,001 stores in 38 states. It also sells heavy-duty truck parts through 43 Truck Pro stores in 14 states.

The transaction is subject to regulatory approvals and other conditions.

Chief Auto's stores are located mainly in California and Texas.

Since 1994, Chief Auto has worked to refine its image from an auto parts convenience store to a full-line auto parts retailer by remodeling and enlarging stores. It's also focused on improving its computer systems to boost worker productivity and inventory management.

More than 80 percent of Chief Auto's stores are either new or have been remodeled since June 1994.

Today's announcement did not say whether the newly acquired stores would take on the AutoZone name or when the transaction was expected to be completed.