Karma Automotive Closes 42 Stores, Hires Financial Advisor to Tackle Liquidity Crunch

Kmart Automotive has engaged Houlihan Lokey as financial advisor to evaluate strategic alternatives, including restructuring or a potential sale, amid liquidity challenges stemming from warehouse financing. Last week, the company shuttered 42 of its "buy-here, pay-here" dealership locations, reducing its total store count by 31% and shrinking its customer base by approximately 18%. The company’s key asset is a portfolio of financial receivables valued at approximately $1.5 billion. While new capital injections could sustain current operations, the reduced scale of the business may weaken its existing support structure.