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Interstate Batteries' plan to expand into Advance Auto Parts stores falls apart

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A deal to place Dallas-based Interstate Batteries products in Advance Auto Parts stores is dead.

The "value envisioned by both parties was compelling, but circumstances changed," Interstate Batteries noted in a statement Tuesday.

The collaboration would have allowed Interstate Batteries, which has a strong reputation among mechanics, to significantly increase its retail presence. Now available in about 200 stores, its products would have expanded to 5,000 Advance Auto Parts locations.

"Challenges arose throughout the process, but Interstate believed those could be resolved. Simply put, the two parties could not reach an agreement where all stakeholders involved benefitted," the statement said.

The company did not elaborate on what sunk the deal. Financial details had not been released publicly.

In an earnings call Tuesday, Advance Auto Parts president and CEO Tom Greco said: "We still believe Interstate Batteries provides a leading brand, quality products and an exceptional service model and we wish them continued success."

As part of the deal, Advance Auto Parts would have dropped its AutoCraft private label car batteries and stocked Interstate Batteries exclusively. The plan was announced in December.

The announcement Tuesday came shortly after Advance Auto Parts released its first quarter earnings. The company's profits were down about $600 million from a year earlier and "comparable" store sales were down by nearly 1 percent.

The company's stock price was down more than 3 percent from Monday's close.

Scott Miller, president and CEO of the privately-owned Interstate Batteries, said in December that the company had about $1.8 billion in annual revenue. The Advance Auto Parts deal, he said, had the potential to pushed Interstate Batteries sales from 18 million batteries to 26 million, or nearly one quarter of the market.

Source: https://www.dallasnews.com/business/autos/2018/05/22/interstate-batteries-plan-expand-advance-auto-parts-stores-falls-apart

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