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Cardis Corp. to Leave Buena Park, Lay Off 90 : Consolidation: The auto parts distributor will move its headquarters and warehouse operations to San Ysidro.

February 16, 1993|TED JOHNSON | SPECIAL TO THE TIMES

BUENA PARK — Cardis Corp., seeking to reposition its automotive parts distribution business in the marketplace, said Monday that it will move its corporate headquarters to San Ysidro and would close its Buena Park warehouse.

About 90 of the company's 140 employees will get layoff notices by the end of the week, a company spokeswoman said. Employees will be given a severance package equal to at least 60 days pay, depending on their length of employment.

The 80,000-square-foot Buena Park warehouse will be consolidated into another Cardis facility in San Ysidro by the end of March. The corporate headquarters will move some time after that, depending on lease negotiations.

Cardis is one of the largest independent auto parts dealers in San Diego County, where it provides parts to about 100 retailers and auto repair shops. It also owns and operates 17 of its 22 Southern California retail stores in San Diego and Imperial counties under the Carquest name.

"It's not any cheaper to operate down there, but we want to be closer to our customers (in San Diego County)," said Kenneth C. Cleveland, company president and chief executive. "We'll be able to expand on that base. The thing to do is to build on your strengths."

The company plans to open additional retail outlets, Cleveland said, in an effort to gain more control over the price of products.

That is part of an overall trend in retailing that has seen the rise of discount warehouses, such as Price Club and Pace Membership Warehouse, which offer lower prices than department stores by cutting overhead and middlemen.

"Our company has not responded to that well," Cleveland said. "What you see today is driven by the Wal-Marts (a discount retailer), those types of operations. You have to find a way of operating less expensively. You have to be more price competitive."

In the first six months ended Oct. 31, the company reported a net loss of $1.3 million, or 61 cents per share, on sales of $34 million.

Cardis already has been cutting expenses and consolidating operations statewide in the past few months to raise cash to pay a $28-million debt. Some of the debt comes from Cardis' acquisition of Tune-Up Masters, a chain of auto service outlets. The company sold off the chain after it emerged from bankruptcy in 1989 and reorganized its debt in 1991. But in December, Cardis said it would default on a loan agreement that was made when it reorganized its debt.

The company also has attempted to sell assets, but a deal to sell several warehouses that serve Northern California fell through last month. The prospective buyer and sales price were not disclosed. Instead, the company is consolidating warehouses in Sacramento and Hayward, Calif., into one operation in Fresno. About 10 employees were laid off in the consolidation.

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