Pep Boys poised to purchase Big 10 tire and auto-service stores

Manny, Moe & Jack, otherwise known as the Pep Boys, are poised to enter the Columbus-Phenix City market through the purchase of Big 10 Tires.

Philadelphia-based Pep Boys, which already operates more than 600 stores in 35 states and Puerto Rico, is now working to finalize the acquisition, sources within both companies say. The deal is expected to be completed early next week, with conversion to the Pep Boys brand occurring through August.

Pep Boys and Mobile, Ala.-based Big 10 Tires — as well as Big 10’s owner, private investment firm Sun Capital Partners — did not return repeated calls seeking comment.

Big 10 dates to 1954 with the opening of its first location in Pensacola, Fla.

“The first year’s sales were primarily in retreads and used tires with a total dollar volume of $54,000,” the company says on its website. It has grown to more than 80 stores in Alabama, Georgia and Florida, according to the site.

Locally, Big 10 operates tire and auto-service centers on Manchester Expressway and Whittlesey Boulevard in Columbus and off U.S. Highway 280 in Phenix City. It also has stores in Auburn and Opelika, Ala.

Big 10 Tires Inc. was purchased by Boca Raton, Fla.-based Sun Capital in November 2006. The chain in April 2009 filed to reorganize its business under Chapter 11 of the U.S. Bankruptcy Code. It cited the economic downturn as the reason.

“We strongly believe that volume levels and premium product sales will return as the economy picks up, and as an outgrowth of the successful reorganization of the company,” Don Kennemer, president and chief executive officer, said at the time.

Big 10 was purchased out of bankruptcy later in 2009 by a Sun Capital affiliate.

Pep Boys began in 1921 as an auto parts store in Philadelphia, founded by friends using the nicknames Manny, Moe and Jack, with those monikers later being incorporated into the businesses’ name. The company topped $100 million in sales in the 1970s, then $1 billion in the 1990s as it reached 500 stores.

In recent years the publicly traded firm (Ticker: PBY) has been under pressure from shareholders to grow more aggressively. That has prompted industry speculation that Pep Boys itself might be sold, although it has been growing through acquisitions and store openings. In the firm’s quarterly and full-year 2010 earnings report, released in early April, Mike Odell, Pep Boys president and CEO, said the chain expects to pick up the pace of store openings sharply this year.

“We opened 35 new locations in 2010 — 28 service and tire centers and seven supercenters,” he said. “That’s on top of 25 new stores in 2009. Our growth will continue to accelerate in 2011, as we have targeted opening 50 new service and tire centers and five supercenters.”

In an April 11 filing with the U.S. Securities and Exchange Commission, Pep Boys also said it expects to open an additional 85 stores in 2012, using a “hub and spoke model, which calls for adding smaller neighborhood service and tire centers to our existing supercenter store base.”

The company, in its financial release, reported a profit of $36.6 million, or 70 cents per share, on revenue of nearly $2 billion in 2010.

Pep Boys handles automotive repair and maintenance services — with the exception of body work — and installs tires, parts and accessories. Most of its stores are open seven days a week, according to the SEC filing, which said the chain employed nearly 18,300 people, about 12,400 of them fulltime, as of Jan. 29.

Ledger-Enquirer staff writer Tony Adams can be reached at tadams@ledger-enquirer or 706-571-8574.

This story was originally published May 4, 2011 at 2:52 PM with the headline "Pep Boys poised to purchase Big 10 tire and auto-service stores."