06/11/2015 Pocket:AutoPartsRetailers'ImmunitytoAmazon.comDrivesStockSurge

https://getpocket.com/a/read/1076475247 1/4

Chritieoden,Outuro19,2015

Auto-PartRetailer'ImmunittoAmazon.comDrivetockurge

Notallrick-and-mortarretailerarerunninginfearfromAmazon.comInc.Jutlookattheauto-partindutr.

ThethreelargetU..ellerofreplacementpartareeeingaleurge,endingtheirtockpriceonaroll.AutoZoneInc.,AdvanceAutoPartInc.andOReillAutomotiveInc.haveallgainedatleataout20percentthiear.Thattrouncethe1.3percentdeclineforthetandard&Poor500Index.

Auto-parttockhaveurgedthiear.TheretailerareenetingfromthefactthatAmericancarareaging,awellaanewwaveoftechnologicalladvancedcarthatootingaletoprofeionalmechanic.Auto-partelleralohaveofarprovenimmunetothee-commercethreatthathaplaguedothermerchant.

"Theauto-repairindutriwell-poitionedecaueitnoteingdiruptedplacelikeAmazon,"aidretJordan,ananaltatJeerieLLC."Whenouneedapart,oucantwaitfortomorrowdeliver.Youneedittoda."

Therearecurrentlaout250millionvehicleonU..road,arecord.Thatpartlduetothelingeringeectofthemotrecentreceion,whichhacauedtheaverageageofvehicletoclimto11.4ear,thehighetever,accordingtodatacompiledloomerg.

www.loomerg.com

Auto-parttockhaveurgedthiear.

06/11/2015 Pocket:AutoPartsRetailers'ImmunitytoAmazon.comDrivesStockSurge

https://getpocket.com/a/read/1076475247 2/4

Attheametime,lowergapriceandhigheremplomenthavedriverputtingmoremileontheircar,creatingaoomingmarketforoilandreplacementtire.Thattrendmacaueauto-partconumptiontogrow3percentto4percentforthenextfourear,accordingtoMichaelMontani,ananaltatvercoreII.

Hugeurge

"Withomanoldcarontheroad,therewilleahugeurgeforrepair,motofwhichneedimmediatepart,"heaid.

Coincidingwiththeagingeetianinuxofnewer,technologicalladvancedvehicle.New-vehiclealeacceleratedtoanannualrateof18.2millionvehicleineptemer,accordingtoAutodataCorp.,whichadjutthegureforeaonaltrend.Thatthefatetpaceinmorethan10ear.

Themoreadvancedcarareincreaingldicultforvehicleownertorepairandmaintainwithoutprofeionalhelp,hiftingretaileraletorepairhopandervicecenter.OReill,AutoZoneandAdvanceAutoPartallaidtheirprofeionaluineearegrowingfaterthantheirdo-it-ourelfuineeintheirmotrecentearningreport.

OReillAdvantage

hareofOReill,aedinpringeld,Miouri,gained32percentthiearthroughtheendoflatweek,leadingitpeer.Roanoke,Virginia-aedAdvanceAutoPartandMemphi-aedAutoZonewerentfarehind,othwithincreaeofaout20percent.Pepo-Mann,Moe&Jack,apartretailerthataloproviderepairervice,harienthiearawell,withtheharegaining26percent.

OReillhaaetterditriutiontemthanitrivalandoperatemoreecientl,Jordanaid.Latear,AdvanceoughtGeneralPartInternationalInc.,addingtheCarquetchaintoitditriutionnetworkinanattempttoulkup.

"OReilladvantagecomedowntotwothing:etterpoitioningandtrongerexecution,Jordanaid."veroneeleitringtogrowtolooklikeOReill."

OReillleaderhiphaevenattractedtheattentionofactivitinvetortaroardValue,whichannouncedatakeinAdvanceAutoPartlatmonth.ThehedgefundthinkAdvanceAutoPartiundervaluedandcouldfuelfurthergaincuttingoverheadand

06/11/2015 Pocket:AutoPartsRetailers'ImmunitytoAmazon.comDrivesStockSurge

https://getpocket.com/a/read/1076475247 3/4

improvingproductourcingtocatchuptoitrival.

OneretailerthathamiedoutontheralliAtlanta-aedGenuinePartCo.Whiletheretoftheindutrhaprotedfromfavoraleauto-indutrdnamic,GenuinePartharefell22percentthieareforeMonda,hurtexpouretoindutrialmarketanddecliningoilprice.

Thecompanpotedmixedthird-quarterreultonMonda.alemiedanaltetimate,falling1.6percentto$3.92illion,utprottoppedprojectionat$1.24ahare.Thetockroe1.7percentto$84.66atthecloeinNewYorktrading.

AmazonNiche

Amazoncouldeventualltarttargetinglocalrepair-hopoperatortotakecommercialuinefromthepartretailer,aidJonHedge,principalatHedge&Co.Thatwouldechothetrategithaemploedinellingtomalluineetochipawaatoce-upplretaileruchatapleInc.

ofar,theonlplaceAmazon,aInc.,andautoiteuchaummitracing.comandJeg.comhavefoundafootholdiinperformanceacceorie,heaid.

TheDIYmarketmagrowtoaout$54illionin2017from$49illionin2014,accordingtoAutoCareAociationdatauedinaGeneralPartpreentation.Thedo-it-for-memarket--uingprofeionalmechanictohandlethework--ialmottwicethatize.Itwaaout$91illionlatearandexpectedtoexpandto$102illionin2017.

"Amazonattractavernichemarketofweekendcarenthuiat,"aidrianponheimer,ananaltatGaelli&Co."Forgeneralconumerneedingrepairpart,IdonteeAmazonaaigthreat."

Auto-partretailermaeetrouleiftheeconomworenandoilpricegoup,queezingconumerpendinganddecreaingmiledriven.Higherinteretratecouldlowcar-uingandhaveatrickle-downeectonauto-partretailer,utAdamFleck,ananaltatMorningtarInc.,aidthateectwouldeminimal.venaadeconomcanegoodecauepeoplewillkeeptheiroldcarratherthanunewone,increaingtheneedforrepair,heaid.

"Auto-partretailertendtoeprettreceion-reitant,"Fleckaid.

06/11/2015 Pocket:AutoPartsRetailers'ImmunitytoAmazon.comDrivesStockSurge

https://getpocket.com/a/read/1076475247 4/4