American Car Center told employees the business was closing its doors, a day after pulling a $222 million bond sale off the market, according to people familiar with the matter.
The used-car retailer, which tends to target consumers regardless of credit history, said in an email to employees on Friday that the company is halting all operations, closing its headquarters in Memphis, Tennessee, and all employees will be out of business by the end of the business day, the people said. The head office has about 288 people.
The closing email came a day after the company sent another message to staff saying management and counsel had been working with lenders to increase liquidity and continue operations, the people said. American Car Center, which has more than 40 dealerships in 10 states, is owned by York Capital Management LLC.
A representative for York Capital declined to comment, while American Car Center Chief Financial Officer Noah Hogan did not respond to questions for his LinkedIn account. No one was available for comment at company headquarters, and repeated calls to several dealers went unanswered.
It’s killing because more Americans are starting to fall behind on their car payments, and the cycle of hardship is accelerating.
Prior to the announcement, American Car Center had delayed a bond deal backed by subprime loans citing market conditions even as investors placed orders for the debt. The company has not borrowed on the asset-backed securities market in over a year, with its first sale in 2018.
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