A little more than a year after surrendering to activist shareholders Barington Capital Group LP and Pirate Capital LLC, auto parts retailer Pep Boys-Manny, Moe & Jack continues to struggle. During its earnings announcement Wednesday, the company outlined a five-year-long restructuring starting with the closure of 31 stores.
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The Philadelphia-based retailer also said Wednesday that its third-quarter loss doubled to $21.6 million, or 42 cents per share, from $10.7 million, or 20 cents per share. Revenue in the quarter, which ended Nov. 3, fell 3% to $535 million from $551 million in the year-earlier quarter.
In addition to changing its product lineup and closing underperforming stores as part of the restructuring, Pep Boys also expects to unlock the value of its real estate, which could be worth up to $1 billion. The company recently completed the sale of 34 properties for $166 million in a leaseback deal, which may be the first of many to come.
Last year, Barington and Pirate waged separate campaigns against the retailer, which at the time had put itself on the auction block. After withdrawing the auction in August because of little interest, Pep Boys made peace with both firms by accepting four directors from Barington and one director from Pirate. — Matthew Wurtzel
See press release via Business Wire
See earnings story from The Wall Street Journal
See earnings story from Philadelphia Business Journal
See TheDeal.com: Pep Boys surrender to Barington
See TheDeal.com: Pep Boys suspend auction
