Auto Depot to open first whse - Specialty Store Focus

Discount Store News, April 15, 1991

Auto Depot to Open First Whse

SACRAMENTO, Calif. -- Auto Depot is set to open its first more than 55,000-square-foot warehouse auto store May 1. It was to be the fourth unit of Auto Giant, a sister chain also started by Robert J. McNulty.

Originally based in Philadelphia, Auto Depot was to have opened units first on Long Island and then in Florida. Instead, it is closing its Philadelphia office and talking merger with Auto Giant. And it bought Auto Giant's Sacramento unit, infusing about $2.3 million in unused start-up cash from an initial public offering into Auto Giant.

All of Auto Depot's original top management, including president Wil Dubin, have recently departed. McNulty appointed John Shanklin, his co-founder of HomeClub, as both president and chief financial officer of Auto Depot.

The Auto Depot cash is helping to keep Auto Giant--another publicly funded start-up--afloat until it can turn a profit.

In a March 20 letter, McNulty warned Auto Giant stockholders that shrunken credit lines from vendors will continue to be a problem until May or June. McNulty predicted that all three Auto Giant warehouses--San Bernardino, Calif., Phoenix and Las Vegas--will be profitable by then.

McNulty said Auto Giant has made considerable progress in the past three months becoming leaner and more efficient.

McNulty also advised stockholders that the failure of its stock underwriter in January had resulted in a collapse of Auto Giant's stock price and choked off access to capital. That dictated a halt to aggressive expansion plans and the sale of the Sacramento unit to its sister corporation.