Pep Boys 2008 Annual Report Download - page 76

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During fiscal year 2008, there was significant deterioration in the global financial markets and
economic environment, which negatively impacted consumer spending and our revenues. If these
adverse trends in economic conditions continue or worsen, or if our efforts to counteract the impacts of
these trends are not sufficiently effective, our revenues would continue to decline, negatively affecting
our results of operations.
Consolidation among our competitors may negatively impact our business.
Recently some of our competitors have merged. If this trend continues or if they are able to
achieve efficiencies in their mergers, the Company may face greater competitive pressures in the
market in which they operate.
ITEM 1B UNRESOLVED STAFF COMMENTS
None.
ITEM 2 PROPERTIES
The Company owns its five-story, approximately 300,000 square foot corporate headquarters in
Philadelphia, Pennsylvania. The Company also owns the following administrative regional offices—
approximately 4,000 square feet of space in each of Melrose Park, Illinois and Bayamon, Puerto Rico
as well as a 1,700 square foot space in Whitemarsh, Maryland. The Company also leases administrative
regional offices of approximately 4,000 square feet of space in each of Decatur, Georgia and
Carrollton, Texas. The Company owns a three-story, approximately 60,000 square foot structure in Los
Angeles, California in which it occupies 7,200 square feet and sublets the remaining square footage to
tenants.
Of the 562 store locations operated by the Company at January 31, 2009, 235 are owned and 327
are leased. As of January 31, 2009, 97 of the 235 stores owned by the Company are currently used as
collateral under our Senior Secured Term Loan due October, 2013.
The following table sets forth certain information regarding the owned and leased warehouse space
utilized by the Company to replenish its store locations at January 31, 2009:
Products Square Owned or Stores
Warehouse Locations Warehoused Footage Leased Serviced States Serviced
San Bernardino, CA . . All 600,000 Leased 161 AZ, CA, NM, NV, UT, WA
McDonough, GA .... All 392,000 Owned 127 AL, FL, GA, LA, NC, PR,
SC, TN, VA
Mesquite, TX ....... All 244,000 Owned 69 AR, CO, LA, MO, NM,
OK, TX
Plainfield, IN ....... All 403,000 Owned 64 IL, IN, KY, MI, MN, OH,
PA, TN
Chester, NY ........ All 400,400 Owned 141 CT, DE, MA, MD, ME,
NH, NJ, NY, PA, RI, VA
McDonough, GA .... All except tires 30,000 Leased — This facility does not ship
directly to stores
Total ............. 2,069,400 562
In addition to the above distribution centers, the Company operates four satellite warehouses.
These satellite warehouses stock approximately 32,000 SKUs and serve an average of 10-30 stores, in
addition to having retail capabilities. These locations were leased and comprised 78,700 square feet.
The Company anticipates that its existing and future warehouse space and its access to outside storage
12