Pep Boys Still Struggles vs. the Do It Yourself Parts Retailers
The Pep Boys – Manny, Moe & Jack, or The Pep Boys as they are commonly called, is somewhat of an anomaly in automotive aftermarket retailing. Two decades ago, as newly minted automobiles were being manufactured with increasing reliance on automation and on-board computers, many predicted troubled futures for the preponderance of aftermarket retailers which focused virtually exclusively on selling enhancement and repair parts to the vast legion of do it yourselfers. At the time it was expected that do it yourselfers would incrementally be forced to seek help in diagnosing and accomplishing needed repairs as new cars became even more computer driven.
As The Pep Boys business platform featured fully operational service bays in addition to offering a full line of replacement and customizing parts to the do it yourselfer, it was expected that this business model would ultimately skyrocket the company to the top of the class and leave the pure do it yourself models likely seeking to ape The Pep Boy’s abilities to offer repairs. Though many do it yourself oriented chains do offer some limited diagnostics, customers remain on their own when it comes to most repairs. Still Pep Boys has yet to exhibit the growth and industry leadership that has been long expected.
Meanwhile AutoZone leads the way with aggressive annual expansion plans while O’Reilly does the same after the huge acquisition of CSK Auto. Advance Auto Parts too has grown after scooping up well managed chains like Discount Auto Parts and remnants of Western Auto.
The Pep Boys financial frustrations can be seen as their recently issued yearly numbers indicated an increase in annual sales of just $27.1 million, or 1.3%. A strong sign of the company’s financial challenges became apparent last year as the company announced that it had agreed to be acquired by The Gores Group, a private equity investment company, for approximately $1 billion. However, four months later it was announced that the acquisition would not come to fruition.
Pep Boys prides itself on being the only aftermarket service and retail chain in the nation which is capable of serving all four segments of the automotive aftermarket: the do-it-yourself, do-it-for-me, buy-for-resale and replacement tires. Given this platform which has been built on a foundation which saw its roots sown in pre-depression 1921, it is a wonder that this appeal to covering all consumer segments within the market remains unique to this company on a nationwide scale. Even as diagnosing and repairing automobiles has become increasingly more elusive, as car-based computer operations become more prominent and sophisticated, purer do it yourself based retailers such as AutoZone and O’Reilly continue to outperform Pep Boys through both financial and growth modes.