The Charlotte, N.C., company did not identify which EchoPark locations it has indefinitely suspended. It also wasn’t immediately clear how many jobs would be cut as a result of the changes.
At least five EchoPark locations, one in Georgia and two each in New York and Maryland, are labeled as temporarily closed online. An EchoPark delivery center, in Salt Lake City, is labeled as permanently closed online, but it is unclear when that closure happened.
A Baltimore Business Journal story last week said EchoPark’s Baltimore and Laurel, Md., locations will shut down in August, eliminating 34 jobs.
Evan Berney, who sold two used-vehicle stores to Sonic in 2021 that became EchoPark locations and is now EchoPark’s digital operations director, told the publication that the two locations are not closing permanently. Berney said that both could reopen; all real estate is remaining; and employees are receiving 60-day severance packages and are being offered the chance to transfer to other Sonic or EchoPark locations. Sonic declined to comment further before its second-quarter earnings call.
Sonic last week said it maintains its goals for EchoPark to reach breakeven earnings before interest, taxes, depreciation and amortization by the first quarter of 2024 and ultimately reach 90 percent of the U.S. population, aided by a growing number of omnichannel sales.
Sonic previously said it would reach that goal by 2025.
“Sonic now believes that the timing of achieving this goal will be predicated on how quickly the pre-owned market normalizes related to inventory availability and pricing,” the company said in a statement.
“Currently, Sonic’s focus is on improving EchoPark’s financial performance.”
Stephens Inc. analyst Daniel Imbro, in a note to investors last week, said his company believes EchoPark’s adjusted EBITDA profitability won’t happen until the third quarter of 2024.
The auto retailer said it expected continued volatility in the wholesale price environment into 2024. Improvements in wholesale pricing, Sonic said, would benefit the overall profitably of the EchoPark model.