Pep Boys Announces Cost Reduction Initiatives - aftermarketNews

Pep Boys Announces Cost Reduction Initiatives

The cost-cutting measures include a company-wide freeze on merit increases, staff reductions and spending reductions.

PHILADELPHIA — Pep Boys said this week it will implement approximately $20.1 million in pre-tax cost reduction initiatives in order to improve the company’s 2009 financial performance.

The cost-cutting measures include a company-wide freeze on merit increases; the elimination of approximately 50 positions, representing 11 percent of the store support workforce; and numerous other spending reductions. In addition, 401(k) matching contributions and certain other retirement contributions have been conditioned on the company achieving profitability targets in 2009. A pre-tax charge of approximately $0.6 million has been recorded in the fourth quarter of the 2008 fiscal year for costs associated with the workforce reductions.

“We have taken these steps to accelerate the company’s return to profitability, which we project will occur in the upcoming year,” said CEO Mike Odell. “Our store base remains strong and no closures are planned, nor are any of our stores impacted by the staff reduction.”

“We expect positive cash flow for fiscal 2009 which, together with our strong balance sheet, provides us with the ability to fund the expansion initiatives of our long-term strategic plan by adding additional service-only locations,” said CFO Ray Arthur.

The company previously announced closing a new $300 million senior secured revolving credit facility with a syndicate led by Bank of America, Wells Fargo and Regions Bank.

You May Also Like

Driven Brands Names Chief Operating Officer

Company appoints Danny Rivera to the newly created role and welcomes back Mo Khalid, who will succeed Rivera.

Driven Brands Holdings Inc has announced the appointment of Danny Rivera to the newly created role of chief operating officer effective February 20, 2023, reporting to chief executive officer Jonathan Fitzpatrick. Driven Brands is also pleased to welcome back Mo Khalid, who will succeed Rivera in the role of executive vice president & group president, maintenance, leading both Take 5 Quick Lube and Meineke. 

Dayco Recruits Craig Frohock as its New Aftermarket/Belt CEO

Frohock is responsible for the business unit’s global operational performance and strategic direction. 

Lucas Oil Promotes, Adds Key Staff to Leadership Team

Jason Bonikowske has been named general counsel, and Nicole York and Megan Burakiewicz have been promoted to VP roles.

Clarios Names New Group VP and GM, Original Equipment

Federico Morales-Zimmermann joins Clarios from BorgWarner, where he served in two VP roles.

Edelbrock’s Smitty Smith Passes Away

According to a blog post from Edelbrock, Smitty worked for the company for 30 years and had been using its products for 50.

Other Posts

Navistar Names Chief Strategy and Transformation Officer

Tobias Glitterstam will be the steward for strategy implementation and he will accelerate sustainability efforts.

FullSpeed Automotive Names VP of Ops for Grease Monkey Brand

Brian Michel steps into this leadership role having worked for FullSpeed for 10 years.

NuVinAir Promotes Marty Schoenthaler to President

Schoenthaler joined NuVinAir from Tate Boys Tire & Service in 2021.

Velocity Modern Classics Names Chief Revenue Officer

Tom Maxwell joins the company with over seven years of experience in the custom vehicle space.