CarParts.com had only $2 million in cash and $20 million of debt. The company was burning through about a million dollars a month.
Then, in 2019, David Meniane ’04, MBT ’05 stepped in as chief operating officer and chief financial officer, and Lev Peker ’04 took over as CEO.
The two USC Leventhal School of Accounting graduates led the company through a remarkable financial, logistical and operational turnaround. They saw record growth and performance during a pandemic.
While doubling revenue, Meniane and Peker took CarParts.com from a $30 million market cap to more than $800 million. Today, the 25-year-old e-commerce site boasts $60 million in cash and has become a leading destination for auto parts online.
How did they do it?
When a company is struggling or in quote-unquote financial distress, there’s a tendency to cut costs. It’s really hard to build a multibillion-dollar business by cutting costs.David Meniane
“The first thing we did is simplify the strategy so that everyone was aligned around the core vision,” Meniane says from the company’s headquarters in Torrance, California. That strategy is based on his business philosophy of financial discipline — which is where the accounting degrees and certified public accountant certifications come in handy — along with operational excellence and outstanding customer service.
“Then, we invested in talent, technology, supply chain, marketing and distribution,” he says. “When a company is struggling or in quote-unquote financial distress, there’s a tendency to cut costs. It’s really hard to build a multibillion-dollar business by cutting costs.”
Instead of cutbacks, CarParts.com doubled down on what he calls “the secret sauce”: talented employees. The company onboarded 800 people in 12 months, including two other Trojans on the executive team. “We hired the best of the best. We brought in experts in data science, inventory, forecasting, warehouse operations, investor relations, corporate finance, marketing — and we give them the resources and the support to execute on the roadmap.”
Meniane, who grew up in France among a family of entrepreneurs and launched his own beverage businesses before joining the automotive industry, said the company mindset is entrepreneurial. “We’re big believers in extreme ownership — you hire a technical expert and they own that piece of the business — and we pay for performance.”
USC Alums Invest in Talent and Customer Service
COVID accelerated a shift from offline to online, and once customers discovered the convenience and price transparency, there was no going back.David Meniane
The site’s investments, including three new distribution centers across the country, meant it was in a strong position before the pandemic. “The company was growing at 40% pre-COVID,” Meniane says. “Then COVID accelerated a shift from offline to online, and once customers discovered the convenience and price transparency, there was no going back.”
Meniane doesn’t see interest in online shopping waning even as COVID-19 restrictions ease. Looking down the road, he sees e-commerce sites focusing on improved customer experience with faster delivery, giving brick-and-mortar stores even stiffer competition. With warehouses in Virginia, Nevada, Illinois, Texas, California and soon Florida, he says CarParts.com is setting the pace. “We see business as a contact sport. Over time, we are going to get closer and closer to the customer. There is a possibility that we will eventually be able to get certain parts to certain customers in 60 minutes or less.”
It’s a lofty goal, but when it comes to business plans, Meniane has proved he’s ready to hit the accelerator.