AutoCanada has taken the next step on what it hopes is the road to recovery with the restructuring of its RightRide division.

The dealership group said the adjustments to its used-car/subprime finance operation include closing seven unprofitable locations — more than half of the division’s 13 stores — as part of its overall “strategic shift to optimize operations and reduce leverage.”

That shift, which began earlier this month with the sale of two franchise dealerships, is AutoCanada’s response to a weak second quarter performance.

The company reported a net loss of $33.1 million for the second quarter during its quarterly earnings call last month, when executive chairman Paul Antony said he is “committed to making the necessary changes to stabilize the company and eventually put us back on the path to profitable growth,” including the divestiture of “underperforming assets.”

The discontinued RightRide operations generated $34.9 million in sales during the 12 months ending June 30, the company said.

In addition to shedding those seven underperforming assets, AutoCanada said the six remaining RightRide locations have been shifted to an “inventory-light” business model and “re-focused on the original strategy to provide credit solutions to credit-challenged used light-vehicle customers.”

During the earnings call, Antony said RightRide had gotten away from that core mission during the COVID pandemic, when used-car demand and dealership profits soared and selling was easy.

“We were selling a lot of cars and taking orders for vehicles, and we started getting more into the near-prime space and lost focus in the subprime space,” he said. “And frankly, subprime is a lot harder. It’s a lot harder to do. It takes a different salesperson. It’s a different sales process. And so we focused on the lower-hanging fruit, which is just selling vehicles because there was a shortage.”

The company said it expects that realignment to strengthen its position in the market and return RightRide to profitability.

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