Strauss Auto files Charter 11

Discount Store News, June 22, 1998

SOUTH RIVER, N.J. -- Strauss Discount Auto, the last element of an auto parts group that Merrill Lynch Capital Partners assembled and financed earlier in the decade, has come unraveled, just as its two previous sister chains had done.

In an apparently preplanned bankruptcy, Strauss filed Chapter 11 June 9, less than a month after a private investment group bought the chain and its WSR Group corporate parent from Merrill Lynch for an undisclosed sum.

Other related corporate entities involved the filing are National Auto Stores Corp. and National Automotive Stores Inc. The number of stores they operate could not be readily determined.

No word has emerged yet on probable closings of some of the ill Strauss units. In its filing, Strauss estimated assets and liabilities as both falling in the $50 million to $100 million range.

The largest debt claim against Strauss is $18.5 million owed to its parent, WSR Group, and the next largest is $13.4 million in bank debt owed to Alliance Corporate Finance.

The 18 largest trade creditors are Exide, $1.9 million; Tire & Battery Corp. $1.3 million; Castrol; $753,296; Allied Aftermath DIVI, $706,614; Purolator, $674,035; Texaco, $602,389; AC Delco, $549,190; Turtle Wax, $495,042; Winner, $484,318, First Brands, $464,444; and Rally, $434,215.

Also: Exxon; $388.791; Phillips Lighting, $382,765; Blue Coral/Slick 50, $377,772; M. Cardone Industries, $351,410; Prestone, $323,423; Clorox, $322,096; and Quaker State, $307,096.

Merrill Lynch started bailing out of the auto parts game in 1994, when it sold Whitlock to Apex Automotive Warehouse, a wholesaler, and then sold Rose Auto Parts to Ackland, a Canadian auto parts distributor.

Whitlock then declared Chapter 11 and ultimately liquidated in 1996.

Rose Auto, based in Hialeah, Fla., declared Chapter 11 in June 1997 and closed all of its 62 remaining stores, down from a high of 96 stores under Ackland's ownership. National Auto Parts Warehouse brought the chain out of bankruptcy last November and has reopened 40 stores.

The owner of Strauss is now a private investor group led by Daniel Gillings, the new president and ceo.

Strauss differs from both Whitlock and Rose in that it offers auto service does as a smaller version of Pep Boys--Manny, Moe & Jack, Philadelphia.

Founded in 1919, Strauss is even older than Pep Boys, launched in 1923. Its operating territory is New York, New Jersey, Delaware, Connecticut, Massachusetts and Pennsylvania.

Gillings was unavailable for comment on his plans for operating Strauss in Chapter 11.

He is a 30-year veteran of the automotive aftermarket. Most recently, Gillings was senior vice president of Englewood Tire Distributors, a wholesale and retail auto parts and service chain based in Englewood, N.J.

Previously, Gillings was president of Somerset Tire Service, Somerset, N.J., another wholesale and retail firm in the auto parts and service sector.