Pep Boys Closes 38 Stores, Cuts 1,500 Jobs

Pep Boys-Manny, Moe & Jack, one of the largest U.S. retailers of auto parts and service, closed 38 unprofitable stores and eliminated about 1,500 jobs as part of a restructuring plan to cut costs. The closures represent 6.1% of the company’s stores and affect 1,200 employees. Two distribution centers were also shut. The Philadelphia-based company cut about 300 more jobs by reducing the number of supervisors and consolidating store-support centers. A spokeswoman declined to elaborate on the company’s statement. The moves would affect about 5.4% of the company’s work force. Pep Boys has missed earnings forecasts for the last four quarters as demand for do-it-yourself auto parts, tires and services has slumped. The company expects to report third-quarter results Nov. 10. The restructuring will result in a pretax charge of $60 million for the quarter, and should result in annual savings of about $70 million, the company said. Pep Boys shares closed unchanged at $4.56 on the NYSE.