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PHILADELPHIA-As part of a newly instituted five-year plan to refocus on core automotive merchandise and optimize sf productivity, the locally based Pep Boys-Manny, Moe & Jack has closed 31 units representing approximately 5% of its total store count. During a conference call, management described them as “low-return stores in ancillary markets and locales with changed shopping patterns.”

They are scattered across 16 states with Texas taking the biggest hit by losing six units. California and Georgia lose three units each. Indiana, Kansas, Louisiana, Michigan, North Carolina and Ohio each drop two stores, and one unit exits each of the following states: Arizona, Colorado, Connecticut, Illinois, Massachusetts, Oklahoma and Rhode Island. As a result, 550 store employees, 3% of the total, will lose jobs, and the company’s store count drops to 560 in 35 states and Puerto Rico.

“Today is the first of several difficult, but essential steps that we will take towards revitalizing the Pep Boys brand and returning to dominance in the automotive aftermarket, an industry pioneered by our founders, Manny, Moe & Jack,” said Jeff Rachor, president and CEO, during the conference call. The new strategy centers on a “hub and spoke” model, he said, which calls for adding smaller neighborhood service shops to existing supercenters. The new service centers will be added “through organic growth and opportunistic local acquisitions,” he said.

The closures follow by weeks a $166.2-million sale-leaseback agreement, as GlobeSt.com previously reported. Today, Rachor said that pact, which involves 34 locations, had closed.

Total revenues for the 13-week quarter ended Nov. 3 totaled $535.4 million, down from $550.8 million for the same quarter a year ago. The company reported a $21.7-million net loss in the most recent quarter, compared with a $10.7-million loss in third quarter 2006.

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