CarLotz Inc., a Richmond-based company facing mounting losses in a tough auto resale market, said this week it is closing 11 of its hub locations across the country as part of a strategic review of its business.
The company, which sells used cars on consignment as opposed to a commission model and got its start as a local startup, said it is shuttering about half of its locations with an eye on “cash preservation and future profitable growth.” The closures will result in a 25%-30% reduction in headcount and will cut down operational losses by roughly $12 million to $13 million on an annualized basis, the company said. But those estimates assume CarLotz (NASDAQ: LOTZ) will be able to sublease certain locations.
“Over the last 12 months, our sourcing has been challenged,” CEO Lev Peker, who joined the company in late April, said in a statement. “Growing our mix of consumer sourced vehicles is a priority to complement our retail remarketing sourcing channel and reduce our reliance…Read the full story from the Washington Business Journal.