Pep Boys 2012 Annual Report Download - page 53

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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.
Healthcare reform legislation could have a negative impact on our business, financial condition and
results of operations.
The Patient Protection and Affordable Care Act is expected to increase our employee health care
costs. While the significant costs of the legislation enacted will occur after 2013 due to provisions of the
legislation being phased in over time, changes to our health care costs structure could adversely affect
our results of operations.
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. During fiscal 2012, the Company sold 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 3,500 square feet in Los
Angeles, California.
Of the 758 store locations operated by the Company at February 2, 2013, 232 are owned and 526
are leased. As of February 2, 2013, 142 of the 232 stores owned by the Company are currently used as
collateral under our Senior Secured Term Loan, due October 2018.
The following table sets forth certain information regarding the owned and leased warehouse space
utilized by the Company to replenish its store locations at February 2, 2013:
Approximate Owned
Products Square or Stores
Warehouse Locations Warehoused Footage Leased Serviced States Serviced
San Bernardino, CA . . . All 600,000 Leased 181 AZ, CA, NV, UT, WA
McDonough, GA ...... All 392,000 Owned 234 AL, FL, GA, LA, NC,
PR, SC, TN
Mesquite, TX ........ All 244,000 Owned 79 AR, CO, LA, MO,
NM, OK, TX
Plainfield, IN ......... All 403,000 Owned 77 IL, IN, KY, MI, MN,
OH, PA
Chester, NY ......... All 402,000 Owned 188 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
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 2013.
14