Company Snapshot: The Pep Boys – Manny, Moe & Jack
Guess Who Joined The Pep Boys Board
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
Total Annual Sales
$2,084,603,000 (Jan. 2015) from $2,066,600,000 (Feb. 2014) from $2,090,730,000 (Feb. 2013)
Robert Hotz- Chairman
John Sweetwood- CEO (interim)
As can be easily seen from the brief annual sales history noted above, Pep Boys has been mired in financial stagnation in recent years. Sales for Jan. 2012, came in at $2.064 billion up from $1,989 billion. Between January, 2002 and the start of the recession in 2008, sales meandered between $2.27 billion and $2.098 billion. For the three prime years of the recession, sales slumped between $1.91 billion and $1.989 billion. Not terrible but not terribly encouraging, barely a pulse.
As the computer age of automobiles has engulfed us, cars have become increasingly more difficult to diagnose, much less repair by do it yourselfers. Thus the Pep Boys business model of offering full diagnostics and repair services should be all the more vital. Competing national aftermarket retailers offer only parts and occasional advice. As Pep Boys has been rolling its newest prototype of offering repairs in a clean, modern, lounge-like environment, it would seem that financials would grow considerably.
Now Pep Boys has added a familiar name to its brain trust. Robert Nardelli, the former chairman and CEO of Home Depot and Chrysler, has been appointed to Pep Boys’ board of directors. In late 2000, Mr. Nardelli was brought on to run Home Depot as the company’s founders stepped aside to pursue other dreams, after building the home center warehouse giant into one of our country’s most prominent business success stories.
Mr. Nardelli was ousted just over six years after his reign began, after a volatile stockholder’s meeting pretty much went out of control over the prospects of his continued reign. The key hesitation in releasing Mr. Nardelli was the more than $120 million golden parachute he had to be given, under contract.
Many of his many critics felt he had turned Home Depot into an institution that was primarily trying to financially please Wall Street rather than consumers. Under his reign the do it yourselfer based Depot acquired a number of pro dealers. On his departure, new management quickly divested itself of these acquisitions, at a considerable financial loss, in order to return the company to its roots. Returning to its roots included the massive hiring of personnel qualified to assist customers in the intricacies of home repair.
This change in leadership has quickly returned Home Depot to its place atop the market. One wonders how much Mr. Nardelli has to offer The Pep Boys who are clearly in need of direction.