Penske Auto waits as Kmart files for bankruptcy protection
The effect today's Chapter 11 bankruptcy protection filing by Kmart Corp. will have on Penske Auto Centers is anyone's guess.
"I can't speculate on what they're going to do," said Luce Zielinski, public relations manager for Penske Auto Centers. "We're respectful of the issue they have to go through. We will continue to operate our business and provide the same quality car care service that our customers have come to expect."
Last May, Kmart and Penske entered into an agreement to restructure and recapitalize the Penske Auto Centers business into a limited liability company, or L.L.C. As part of the recapitalization, Kmart received a 22% equity position in Penske Auto Centers.
Five months ago, then Kmart President and COO Mark Schwartz told Modern Tire Dealer that Penske will continue to be "our brand partner, delivering high-quality car care to our customers." At the same time, Peter Klein, Penske Auto's COO, said, "When Kmart opens a new store, we open a new store. In that sense, we are working in concert with Kmart. They want stores in the right markets. So do we." Schwartz has since left the company.
Although closing stores under Chapter 11 is an option, there is no telling if any of the 627 Kmart stores tied to Penske Auto Centers will be closed. Kmart runs 2,100 outlets.