"We just do not have the market density that we need in most ofour markets," said CEO Mike Odell. Even in its strongest two metroareas, Philadelphia and Los Angeles, Pep Boys, with 560 unitsnationwide, could stand to beef up, he said. The company istargeting the purchase of 30 stores per year over the next fewyears, and Odell said it would be happy buying between 20 and 40units annually during that time.

Despite management's goals of growth, Pep Boys had a roughquarter financially due to the amount of miles driven by Americansdeclining every month this year, Odell said. "The economicenvironment in which we've been operating has been difficult," hesaid.

During the third quarter, same-store sales fell 10.4% year overyear, including a 12.1% plunge in the retail parts of the storesand an 8.2% dip in Pep Boys' service areas. The net loss of $7.3million was better than Q3 of last year, when the company lost $28million, but that period included an inventory write down and otherexpenses.