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Lithia Motors restructuring

Medford, Ore.-based Lithia Motors Inc., the parent company of the local Lithia dealerships, announced its plans to sell off some dealerships and restructure dealership operations to cut costs.

Medford, Ore.-based Lithia Motors Inc., the parent company of the local Lithia dealerships, announced its plans to sell off some dealerships and restructure dealership operations to cut costs.

"We're working on getting some of our facilities up for sale," Lithia spokesperson Robert Sacks said.

Sacks declined to say which dealerships were for sale or how the Grand Forks dealerships would be affected by Lithia's restructuring.

Local Lithia officials were unavailable for comment.

The company said in a press release that the financial belt-tightening was a result of the challenging times facing the automobile industry with recessionlike conditions and high gas prices eating away at the bottom line.

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"As the economic environment has worsened, we have taken a comprehensive look at our business and determined how it can be right-sized to achieve our profit margin and growth objectives for the long term," Sid DeBoer, CEO and Chairman of Lithia Motors said in a prepared statement.

Lithia Motors plans cost reductions by the end of September to total $18 million, in addition to $6 million in cuts announced in April.

Cost-cutting moves will include selling off 10 to 15 underperforming dealerships, deferring uncommitted capital expenditures, selling off excess property and assets, adjusting vehicle pricing and inventory mix for demand, restructuring store management personnel and laying off employees across the company, reducing corporate expenses and consolidating offices.

Lithia's dealerships on Gateway Drive are preparing to move to new locations south of 32nd Avenue South.

Two separate Lithia dealerships -- one for Toyota and Scion and one for Chrysler, Jeep and Dodge -- are under construction just east of Sam's Club. The new dealerships are near the existing Lithia Ford Lincoln Mercury dealership.

Lithia's Hyundai dealership by 32nd Avenue South has closed and Eide Motors has taken over selling the Hyundai brand.

Briefly

--A Lillian's boutique purse shop plans to open Aug. 7 in downtown Bismarck, according to the Bismarck Tribune. The new shop will be open the first Thursday through Sunday of each month and will also be available for purse parties and private openings.

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--U.S. chain store sales jumped by 4.3 percent in June, the highest monthly sales gain in more than a year, according to the International Council of Shopping Centers. Wal-Mart's 6.4 percent sales growth, federal stimulus checks and warmer weather contributed to the increase.

--Retail sales increased by 2.6 percent in June, according to ShopperTrak's national sales estimate. Meanwhile, foot traffic in stores was only up 0.9 percent in June, according to ShopperTrak's retail traffic index.

--The average family with school-aged children will spend $594 on back-to-school purchases this year, up from $563 last year with total back-to-school spending forecast to reach $20.1 billion this year, according to a National Retail Federation survey. The survey found that one-fifth of parents have set aside a portion of their federal stimulus checks for back-to-school purchases.

Schuster covers business. Reach him at (701) 780-1107; (800) 477-6572, ext. 107; or send e-mail to rschuster@gfherald.com . Read his business blog at www.areavoices.com/bizbuzz .

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