America’s Car-Mart Inc. announced plans to close 42 dealerships over the next week as the company works to address financial and market challenges impacting its lending operations.
The closures, disclosed in a filing Tuesday with the U.S. Securities and Exchange Commission, will reduce the company’s footprint from 136 dealerships to 94 locations across 12 states by April 14. Company officials did not specify which locations will be affected.
CEO Doug Campbell said the decision comes as the company faces delays in securing a key financing component known as a non-recourse revolving warehouse credit facility, which is needed to restore its ability to originate loans.
“This is not a singular Car-Mart decision — it requires alignment among multiple counterparties,” Campbell said. “It has become increasingly clear that the path to resolution is less certain and may require an extended deadline, primarily driven by broader market conditions and factors largely outside our control.”
The Rogers-based company has recently taken steps to restructure its financial operations, including replacing what Campbell described as an “inefficient lending facility” with a $300 million term loan. He said a new loan operating system is producing improved credit outcomes.
Despite those changes, Campbell said the company is facing what he described as a “near-term liquidity challenge,” limiting its ability to meet customer demand.
“To be clear, this is a near-term liquidity challenge,” he said. “We are taking these actions to protect that value for stakeholders.”
The closures represent approximately 31% of the company’s total store count but account for about 18% of its customer base. Campbell said the company will also reduce support staff tied to the affected locations.
“We did not make this decision lightly and are taking these steps because they are the right thing to do for the long-term health of this business,” he said.
The company expects to record a non-cash charge of approximately $14 million related to assets at the closing locations. Additional costs tied to layoffs and lease exits are anticipated but have not yet been estimated.
The move follows earlier cost-cutting efforts. During its third quarter, which ended Jan. 31, Car-Mart reported a loss of $76.71 million, or $9.25 per share, compared to a profit of $3.15 million, or 37 cents per share, during the same period a year earlier. Revenue declined 12% to $286.79 million.
The company had already closed 18 dealerships earlier this year as part of a broader cost-control strategy, reducing its store count from 154 to 136 at that time.
Campbell said the company will continue evaluating its remaining locations and may take additional action if necessary.
Customers impacted by the closures will have their accounts transferred to nearby dealerships or handled through the company’s central operations team. Officials said the company’s digital payment platform, which processes about 65% of payments remotely, will allow customers to continue making payments without interruption.
“The buy-here-pay-here model is durable, and the credit quality improvements we have built over the past two years are real,” Campbell said. “The actions we are taking today are designed to protect what we have built and position Car-Mart for the future.”
