Pep Boys 2010 Annual Report Download - page 4
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2
We opened 25 new stores in 2009, 35 in 2010 and plan to open 55 more in 2011 - both organically and
through acquisitions. Most of our new stores are Service & Tire Centers. They are smaller in size and closer
to where our target customers live and work. They leverage the inventory, delivery operations and marketing
of the Supercenter five to fifteen minutes away, while improving our market density. As an example, we have
gone from eight to 23 stores in the Orlando market in just over a year’s time. The typical Service & Tire
Center is about six bays and will do about $1 million or more in sales at maturity. They live up to Does
Everything. For Less. Plus they are more convenient for our customers.
Establish a Differentiated Retail Experience by Leveraging Our Automotive Superstore. We have the
broadest range of maintenance, performance and appearance products and accessories among national chains.
Our combination of service and retail makes us a leading installer of automotive after-market products. We
are focused on core automotive and continue to optimize our network to provide the highest level of
replacement parts coverage.
Our new Supercenter design features a smaller footprint that showcases our service offering and parts
availability and enables a consolidated labor model. And we are very pleased with its impact on the customer
experience, operating efficiency and financial performance. So we have started to test how we will convert
our existing stores to this One Team concept that is a win for our customers, our associates and our
shareholders.
Leverage our Automotive Superstore to provide the most complete offering for our Commercial
customers. We support other installers also, not just with parts and fluids but also with tires, equipment,
accessories and services. Like our Service & Tire Centers, this leverages our inventory; and the delivery
operations also support our Service & Tire Centers.
The result of our constant focus on our vision and strategies is continued improvement in our profitability and a
healthy balance sheet. As of year-end, we had no borrowings on our revolving line of credit and $90 million of cash
on hand with which to grow our business and be The Automotive Solutions Provider of Choice for the Value
Oriented Customer. Our team is very energized about what we have accomplished over the past few years and even
more excited about our prospects for the future. Thank you for investing alongside of us.
Michael R. Odell
President & Chief Executive Officer
April 29, 2011