Sale of 100 Express Stores Consummated

22 October 1998

Sale of 100 Express Stores Consummated

    PHILADELPHIA--Oct. 21, 1998--The Pep Boys - Manny, Moe & Jack , the nation's leading automotive aftermarket retail and service chain, announced that the sale of the real estate assets relating to 100 of its non-service/non-tire format Express stores to AutoZone Inc. for $108 million closed Wednesday.
    The proceeds from this transaction, which excluded inventory and certain other assets, will be utilized to repay existing debt obligations.
    Pep Boys currently operates 627 stores and 6,480 service bays in 37 states, the District of Columbia and Puerto Rico.

    Commentary
    Pep Boys' CEO, Mitchell G. Leibovitz, made the following comments:
    "A financially attractive sale of our Express stores has been a key objective. In addition to strengthening our balance sheet, this transaction further enhances our unique strategic position by reducing our dependence on the 'do-it-yourself' category at the same time we are dedicated to maximizing the competitive advantages that we enjoy in our highly successful service and tire offerings as well as our rapidly growing commercial delivery program.
    "With respect to commercial delivery, we have transferred a significant percentage of the accounts that we serviced from the Express stores that were in the program to neighboring Supercenters, which should improve the profitability of the program as well as our return on capital."