Earl Scheib Inc., owner of a chain of auto-body paint shops, plans to close 26% of its stores in the next three years as part of an effort to reduce costs.
The Beverly Hills-based company will close 41 of its least profitable 155 stores to concentrate on business in California, Arizona and other states where winter weather doesn't keep customers from seeking new paint jobs. The step could eliminate as many as 328 jobs, or 33% of its staff, said Chief Financial Officer Charles Barrantes.
The firm's loss in the fourth quarter ended April 30 nearly tripled to $2.7 million, or 63 cents a share, from $931,000, or 21 cents, a year earlier. Earl Scheib's business has suffered as manufacturers use better-quality paint on their automobiles, reducing demand for its services.
Earl Scheib shares were unchanged at $2.55 on the American Stock Exchange.