Pep Boys 2011 Annual Report Download - page 59

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If the economy does not continue to strengthen, or if our efforts to counteract the impacts of these
trends are not sufficiently effective, our revenues could decline, negatively affecting our results of
operations.
Consolidation among our competitors may negatively impact our business.
Our industry has experienced consolidation over time. If this trend continues or if our competitors
are able to achieve efficiencies in their mergers, the Company may face greater competitive pressures
in the markets in which we 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 and a 60,000 square foot office building in Los Angeles, California. 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. The Company leases an
administrative regional office of approximately 4,000 square feet in Carrollton, Texas.
Of the 738 store locations operated by the Company at January 28, 2012, 232 are owned and 506
are leased. As of January 28, 2012, 126 of the 232 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 28, 2012:
Approximate Owned
Products Square or Stores
Warehouse Locations Warehoused Footage Leased Serviced States Serviced
San Bernardino, CA . All 600,000 Leased 181 AZ, CA, NM, NV, UT, WA
McDonough, GA . . . All 392,000 Owned 229 AL, FL, GA, LA, NC, PR,
SC, TN
Mesquite, TX . . . . . . All 244,000 Owned 78 AR, CO, LA, MO, NM,
OK, TX
Plainfield, IN . . . . . . All 403,000 Owned 73 IL, IN, KY, MI, MN, OH,
PA
Chester, NY . . . . . . . All 402,000 Owned 178 CT, DE, MA, MD, ME,
NH, NJ, NY, PA, RI, VA
Philadelphia, PA .... Tires & Batteries 74,000 Leased 63 DE, NJ, PA, VA, MD
Total ............ 2,115,000
In addition to the distribution centers above, the Company leases one 20,000 square foot satellite
warehouse. This satellite warehouse stocks approximately 40,000 Stock-Keeping Units (SKUs), serves
21 stores and has retail capabilities. The Company anticipates that its existing and future warehouse
space and its access to outside storage will accommodate inventory necessary to support future store
expansion and any increase in SKUs through the end of fiscal 2012.
ITEM 3 LEGAL PROCEEDINGS
The Company is party to various actions and claims arising in the normal course of business. The
Company believes that amounts accrued for awards or assessments in connection with all such matters
15