Just two weeks after appointing a new CEO, automotive parts and accessories retailer The Pep Boys – Manny, Moe & Jack is exploring a possible sale of the company.
This morning Pep Boys, No. 184 in the Internet Retailer 2015 Top 500 Guide, announced it was exploring several strategic options, including selling the company.
Pep Boys has set no timetable for a sale or another alternative but has hired investment banking Rothschild Inc. and the law firm Morgan, Lewis and Bockius to assist with its strategic discussion. “Given that a number of potential strategic and financial buyers have expressed an interest in discussing a transaction with Pep Boys, we have determined that it is prudent to explore strategic alternatives to determine the best opportunities for enhancing shareholder value at this time,” says CEO Scott Sider.
After a search that lasted multiple months Sider was appointed Pep Boys CEO on June 15. Previously Sider worked as the group president of Rent A Car Americas, a division of Hertz Corp. with over 3,200 locations and 16,000 employees. Sider also held other executive jobs at Hertz, a company he joined in 1983.
The decision to explore strategic alternatives comes at a time when Pep Boys is looking to improve its financial performance.
For the first quarter ended June 8, Pep Boys reported:
- Total sales increased 0.6% to $542.2 million from $538.8 million in the first quarter of 2014.
- Comparable-store sales decreased 0.5%.
- Net earnings were $11.9 million compared with $1.6 million in the first quarter of 2014.
Pep Boys doesn’t break out quarterly web sales, but in 2014 e-commerce was a bright spot.
For the 2014 fiscal year 2014 ended Jan. 31, Pep Boys reported:
- Web sales of $165.0 million, up 65% from e-commerce sales of $100 million in 2013.
- Total revenue of $2.08 billion, an increase of 1% from $2.06 billion in 2013.
- Comparable retail sales down 1.9%.
- Net loss of $27.3 million compared with a $6.9 million gain in the year-ago period.
So far in 2015 Pep Boys sees e-commerce as big growth driver. “We are continuing to grow our digital sales at about a 50% year-over-year clip,” executive vice president and chief financial officer David Stern told Wall Street analysts on the company’s June 8 first quarter earnings call, according to a transcript from SeekingAlpha.com.