Massive Cutbacks At Pep Boys

PHILADELPHIA--Pep Boys is eliminating some 1,500 jobs nationwide as part of a massive plan to slash expenses. The strategy includes closing 38 unprofitable stores and two distribution centers, resulting in the loss of about 1,200 jobs.

Also being reduced is the number of field and distribution center supervisors along with consolidation of the store support centers--these moves are cutting about 300 other positions.

In addition, the company has “modified the management structure within its stores and rationalized its hours of operation to better correspond with customer demand on a store specific basis,” with the change-package expected to save $70 million.

The company’s third quarter results for the past 13 weeks “will include an estimated $60 million pre-tax charge to earnings to reflect the required write-down of assets relating to the store closures, severance and other related costs as well as costs associated with the recently completed refinancing of its credit facilities.”

In addition to the expected improvement in earnings resulting from what management is calling a “profit enhancement plan,” Pep Boys plans to make some $50 million by selling its “retired assets.”

Pep Boys currently operates 627 stores and 6,486 service bays in 36 states and Puerto Rico.

For more information, contact www.pepboys.com.