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Saturday, May 17, 2008

Advance Auto has ideas for your rebate

The company will launch an ad campaign urging people to catch up on car maintenance.

Advance Auto Parts is joining the lineup of retailers vying for your economic stimulus check.

The auto parts chain said Friday during a conference call with analysts that it is ramping up store signage and radio and television ads to encourage customers to spend the federal checks, ranging from $300 to $1,200 per household, at its stores. The federal government began issuing the funds this month.

Advance shares also climbed 12 percent to $38.82 on Friday, after news that the retailer's first-quarter profits beat analysts' projections.

During the morning conference call, Advance executives updated analysts on plans to attract customers to its stores, which are a focal point of its turnaround strategy. Along with urging customers to spend stimulus checks, the Roanoke-based retailer has hired more bilingual store employees and added to its auto parts and merchandise mix.

Sales at Advance stores open for a year or longer were down in the first quarter, and traffic at its retail stores, called the do-it-yourself segment, has declined in the past few years, executives said.

"We are focusing on transforming the DIY space over the next 12 to 36 months," said Elwyn Murray, executive vice president and customer development officer at Advance.

The timing of the government's stimulus money comes at the right time to promote automobile maintenance, executives said. Advance's advertising encourages customers to spend their rebate checks "on those automotive projects or discretionary purchases that have been delayed out of economic necessity," Murray said.

Also, more Advance store employees can speak Spanish. The retailer's bilingual staffing levels rose 16 percent in the first quarter compared with last year.

Lately, Advance has added to its auto parts assortment, including two new brands: MOOG Chassis Parts and Wagner Brake Parts. Global positioning system devices also are new additions to its stores.

Other initiatives, including training employees to sell complementing car parts and accessories, such as oil and oil filters, are supposed to help Advance refocus it business on the customer, executives said.

After Advance's first-quarter results, analysts from Credit Suisse in a report praised Darren Jackson's ability to lead the company. Jackson took over as president and chief executive officer in January.

"We believe Mr. Jackson is steering this company in the right direction," the report said.

However, the report warned that future financial results could be affected by economic factors, such as "soaring gas and food prices pushing the core low-end customer to drive less and spend less on fixing their cars."

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