AutoCanada closed seven RightRide dealerships across Canada as part of a restructuring effort.

The move reduces RightRide’s dealership count by more than half. Edmonton-based AutoCanada said the closed locations were underperforming.

The closures are part of a broader strategic effort to optimize operations and reduce the company’s financial leverage, said AutoCanada in a news release. The six remaining RightRide dealerships are located in Edmonton, Calgary, Saskatoon, Winnipeg, Guelph, Ont., and Hamilton.

These remaining locations will transition to an inventory-light business model, refocusing on RightRide’s original mission of providing credit solutions for customers with challenged credit histories who are seeking used light vehicles, said AutoCanada. The company anticipates that the shift will return RightRide to profitability and strengthen its market position.

“To position our business for sustained profitability, we have made the difficult decision to close select underperforming RightRide stores,” said Paul Antony, AutoCanada’s executive chairman, in a news release. “By focusing on our profitable locations and returning to our original strategy, we are confident that the operational efficiency and profitability of our remaining stores will improve.”

AutoCanad also announced an amendment to its senior credit facility. The amendment offers a one-year covenant relief period.

“This amendment provides the company with enhanced financial flexibility to support its strategic restructuring plan over the next 12 months, focusing on cost reduction, portfolio optimization, and deleveraging,” said AutoCanada.

In addition, AutoCanada it is conducting a strategic review of its non-core and underperforming assets.

The review has led to the RighRide location closures and the recent sale of two non-core Stellantis dealerships in the secondary markets of Airdrie, Alta., and Ponoka, Alta.

AutoCanada expects the strategic review and operational improvements led in partnership with Toronto-based Bain & Company, to enhance overall profitability, deleverage the balance sheet, and refine the company’s focus on its core operations.

AutoCanada is a leading North American multi-location automobile dealership group, currently operating 83 franchised dealerships across eight provinces and a location in Illinois. The company represents 28 vehicle brands and also operates 11 standalone collision-repair centres.

Pictured: RideRide dealership in Edmonton that has remained open following the closure of seven other locations.

Photo: RightRide