BREAKING NEWS: Strauss Discount Auto closed 45 stores overnight — including those in Bergenfield, Lodi and East Rutherford — after filing for Chapter 11 bankruptcy for the second time in three years, and the third time overall, this time throwing 700 or so people out of work.
As reported by the Brooklyn-based website Sheepshead Bites:
Employees and customers of the chain were equally surprised this morning to arrive at locations in New York, New Jersey and Pennsylvania to find gates down and signs in the windows declaring stores closed, and directing customers to call 800-787-4554, and employees to call supervisors.
[A merchandising representative] informed us that the company had declared bankruptcy overnight, and that all branches were closed.
She did not have specifics about the number of employees, but estimated it as more than 700 chainwide.
The Strauss website has been taken down … READ MORE….
If you have a vehicle at one of the shops, call the 800 number. Sheepshead Bites Publisher Ned Berke, a Rutgers University grad, said he was told that regional managers will be spending the next few days returning vehicles to their owners.
Strauss Discount Auto was founded in 1919 in Newark as Roth & Schlenger Home and Auto Supplies.
It became a full-fledged chain when it merged with Brooklyn-based Strauss stores in 1983, which owned five stores and a warehouse.
The merger formed the largest retailer in the Northeast, consolidating about 70 stores, according to an archived page of the company’s history.
In 1987, the company acquired Penn-Jersey Auto Parts, then was later acquired by Merril Lynch Capital Partners.
The management team changed the company name to Strauss Discount Auto in 1995.
Four years later, it filed for Chapter 11 after majority owner Japan’s Autobacs Seven Co. Ltd. stopped investing and called in its loans. Strauss listed assets of $75 million and liabilities of $72 million at the time.
The company was acquired in 2010 by SDA Inc., based in South River (Middlesex County), which promised to “aggressively focus on Service, Tire and Repair segments.”
It received certification for a joint reorganization plan from the U.S. Bankruptcy Court for the District of Delaware, received a $10 million revolving line of credit from a Connecticut bank and set to work.
Employees at the time were protesting a two-year wage freeze and loss of pension funding.
The number of Strauss retail locations and automotive service centers in New York, New Jersey and Pennsylvania dropped from 73 in 2009 — and 86 just a few years earlier.
Strauss CEO Glenn Langberg called the reorganization plan “a key milestone in our ongoing restructuring efforts” and “the start of a new chapter in the history of Strauss Auto.”
The new chapter came last night, though not in the form Langberg anticipated.
Other Strauss stores closed overnight include locations in Wayne, Jersey City and North Bergen, among nearly two dozen altogether.
This comes a week after Manny, Moe & Jack, the Pep Boys, called off a planned $791 million acquisition by investment firm The Gores Group.
Despite increased competition from AutoZone Inc. and Advance Auto Parts Inc., among others, Pep Boys President and CEO Mike Odell said the Philadelphia-based company is in great shape, with more than 700 locations in 35 states and Puerto Rico.
(One of the original Pep Boys, Maurice “Moe” Strauss, was the brother of Izzie Strauss, who launched the original Strauss Auto in Brooklyn. The company was acquired by R&S to create R&S Strauss Auto, which later became Strauss Discount Auto. Izzie was also the model for one of the caricatures in the Pep Boys logo. Big thanks, again, to Sheepshead Bites, for pointing that out.)