Pep Boys Closes 31 Stores, Cuts 550 Jobs
Philadelphia, Pep Boys - Manny, Moe & Jack said late Tuesday it cut approximately 550 jobs and closed 31 stores as part of a five-year restructuring plan. Meanwhile, its third-quarter loss widened partly on declining merchandise sales.
The job cuts, which represent about 3% of the auto-parts retailer’s total work force, all come from the store closures. Pep Boys said the stores, which comprise about 5% of its total store count, are located in ancillary markets and areas where shopping patterns have changed.
The company’s restructuring plan includes placing more emphasis on its core automotive merchandise and maximizing square footage productivity. Pep Boys said the plan also includes aggressively marking down merchandise and selling non-core and slower-selling products.
Pep Boys also plans to add smaller stores to its existing Supercenter base through acquisitions and new centers. The company, which started a sale leaseback process to help come up with funds needed for the plan, recently completed a sale leaseback on 34 stores for $166.2 million in gross proceeds.
In addition to restructuring plans, Pep Boys’ reported that its continuing operations’ third-quarter loss widened to $21.7 million compared with a loss of $10.7 million in the prior year.
Revenue for the period ended Nov. 3 dropped 3% to $535.4 million from $550.8 million. Same-store sales fell 2.9%, including a 4.1% same-store merchandise sales decline and a 2.6% increase in same-store service revenue.