2010 — A look into the past: Pep Boys expanding
(Editor's Note: This story is part of our #TireBiz30 in which we feature one archived story every day of September to celebrate Tire Business' 30th anniversary. Each story represents one of the most relevant news story published in our pages for that year.)
PHILADELPHIA — Pep Boys–Manny, Moe & Jack plans to open 40 Service & Tire Centers locations this year and as many as 80 in 2011 after opening 24 of the smaller, tire and auto service-dedicated sites during fiscal 2009.
Pep Boys launched the Service & Tire Centers concept last June with the goal of opening 15 such stores throughout fiscal 2009. That goal expanded in September with the purchase of Florida Tire Inc. and its 10 retail tire stores in the Orlando, Fla., area.
The Service & Tire Centers stores are smaller than Pep Boys' traditional stores at between 5,000 and 6,000 square feet and six bays and are designed to perform basic automotive services, including tire installation, while carrying a smaller assortment of retail items. This allows Pep Boys to build them on a smaller footprint at a lower investment, the company said.
Philadelphia-based Pep Boys said in the past it expects the new centers to generate $1 million to $1.5 million in sales and $150,000 to $200,000 in pre-tax earnings annually. Each store represents an investment of $450,000 to $550,000.
The company budgeted $50 million last year to build 20 to 40 service-only stores and for general improvements to existing stores.
Pep Boys initially is targeting Southern California, the Northeast and Chicago metro area for the new stores, according to materials posted on its Web site. Most recently it opened a store in Westminster, Md., to serve the Baltimore metro market.
The growth in store count will support Pep Boys' goal of staying in the black and achieving single-digit sales growth this year, the third year of a three-year turnaround plan, CEO Mike Odell said in a conference call with financial analysts.
"Our commitment for 2010 is to 'Get to Great' as we focus on growing sales and continue to improve our execution, disciplines and profitability," said Mr. Odell, who noted first quarter 2010 sales have rebounded across all lines of business, running about 3 percent ahead of last year on a comparable store basis.
Copyright © 2013 Crain Communications Inc. All Rights Reserved.