Shift to file for bankruptcy, closes stores & website
For the second month in a row, a major used-vehicle retailer filed for bankruptcy with the intention of shutting down operations.
Late on Friday, Shift Technologies announced that it and its subsidiaries intend to file a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court to implement an orderly wind down of its business.
To facilitate the process, the omnichannel used-vehicle retailer said it will utilize cash on hand and cash generated by the liquidation of inventory through wholesale channels to provide the necessary liquidity to support the wind down and closure of operations during the Chapter 11 process.
The company’s two locations in Oakland, Calif., and Pomona, Calif., and the company’s website have ceased operations, according to a news release.
“We deeply value our employees, customers, partners, and the communities in which we have operated,” Shift chief executive officer Ayman Moussa said in the release. “This was not the outcome we had expected or hoped to achieve.
“This decision follows months of trying to raise capital and restructure the balance sheet to allow the company to operate unencumbered in this challenging environment,” Moussa continued. “Ultimately, the extensive efforts of our senior leadership team and advisors were not successful. We want to thank all our dedicated employees, customers, and vendors who have supported us over the years.”
The recent efforts came after Shift trimmed 34% of its workforce this summer. That cut happened after the company started the year with a 30% reduction in its workforce.
Shift merged with CarLotz in 2022, a move that was completed in December. In February, Shift said it was ending its operations of the East Coast CarLotz stores it obtained in that merger. It also closed the former CarLotz location in Downer’s Grove, Ill., and the one remaining former CarLotz location in Pomona, Calif., transitioned to a Shift omnichannel facility.
The company also acquired Fair’s dealer listing marketplace technology in 2022 and had planned to use it to launch a dealer listings marketplace.
The decision by Shift landed about a month after Off Lease Only, a Florida- and Texas-based used-car retailer whose stores were previously among the leading used-car dealers in the country, voluntarily filed for Chapter 11 bankruptcy.
Off Lease Only said it was closing its stores amid an auto retail environment it said has been “deteriorated” by scarce supply, price inflation and lack of demand and affordability.