Pep Boys 2012 Annual Report Download - page 2

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THE PEP BOYS −MANNY, MOE & JACK
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
________________
LETTER TO OUR SHAREHOLDERS
________________
In 1921, our founders, Manny, Moe & Jack, started our company and pioneered the automotive aftermarket with
a commitment to “treat our customers as we should like to be treated ourselves.” As we turn the page to 2013, we
are driven by that very same principle. We are using information gathered from our 20 million Rewards customers
to better understand how we can exceed our customers’ expectations. We have identified target customer segments
that we believe provide us with the greatest opportunity for success. And we are sharpening our focus on the
experience that we believe these customer segments desire, but cannot currently find in the automotive aftermarket.
It begins with our associates and working with them on how to build long-term relationships with our customers,
rather than simply addressing their immediate purchase need. Our associates are learning how to first build the kind
of rapport with customers that not only leads to great satisfaction with the current transaction, but will lead to
customers choosing Pep Boys for all of their automotive needs in the future. We have reinforced our commitment to
our customers to: be friendly; do it right; keep our promises; and show compassion.
We will continue to bring existing and new customers to our stores with an innovative mix of broad reach, digital,
direct and local marketing campaigns. Based on our marketing efforts in recent years, customers understand the
breadth and depth of the automotive services and products that we offer and our value proposition. We will now
build on that base of understanding and shift our brand positioning to more customer service oriented messaging.
At our stores, customers will continue to be able to satisfy all of their automotive needs through our unique
offering of service, tires, parts, accessories and knowledge. Our full service capabilities, ASE (Automotive Service
Excellence) certified technicians and broad assortment of branded and private label products provide us with a
competitive advantage over other automotive service providers. The size of our Supercenters also allows us to
provide the highest level of replacement parts coverage and the broadest range of maintenance, performance and
appearance products and accessories in the industry.
Recently, we began testing a new market concept that we call “The Road Ahead” in Tampa, Florida. Designed
around the shopping habits of our target customer segments, this concept enhances the entire store experience -our
people, our product assortment, the exterior and interior look and feel of the store, and our associated marketing
programs. The goal is to learn how we can succeed in attracting more customers from the targeted segments, and
earn a greater share of their annual spend in the automotive aftermarket.
At the same time, we will continue to grow our footprint through both new physical locations and an expanded
on-line presence. Our Service & Tire Centers and our e-SERVE digital platform are designed to make it easier for
our targeted customers to develop a relationship with Pep Boys.
While 2012 began with the uncertainty of a potential go-private transaction,that is now behind us. We used the
settlement proceeds and the excess cash we have generated from operations to reduce our debt and settle our pension
liability, thereby further strengthening our balance sheet. We also strengthened our senior leadership team by adding
a Chief Customer Officer to guide our strategic development, a Chief Financial Officer focused on operational
analytics and, importantly, a new store leader with a strong background in delivering world-class customer service.
Together, we have identified our target customer segments and are educating our associates on how to deliver the
experience that our customers deserve and expect.
Thank you for continued belief in The Pep Boys - Manny, Moe & Jack, and for investing in our bright future.
Michael R. Odell
President & Chief Executive Officer
April 26, 2013