Pep Boys appoints new CEO and CFO

In a surprise shake-up of its leadership ranks today, Pep Boys - Manny, Moe & Jack named a new chief executive officer, its fourth in less than two years.

The iconic Philadelphia auto-parts and service company said Mike Odell, 45, chief operating officer, would serve as interim CEO and replace Jeff Rachor, 49, who had been CEO for only 15 months. The company also said Ray Arthur would report to work Monday as its new chief financial officer.

Officials said the changes had nothing to do with the company's tumbling stock price in recent months or potential pressure from shareholders. Rachor simply decided to move back to Tennessee, the company said. The new CFO replaces Harry Yanowitz, who announced his departure in January.

"This was the most difficult decision of my career because I really believe in the direction that Pep Boys is taking, and I really love the people and the dedication of the people at Pep Boys," said Rachor, who planned to return to his first love, the auto-dealership business.

He said it was time to rejoin his teen-age children and his wife in Tennessee. They had been visiting him since Rachor took the job in March 2007 and moved to Rittenhouse Square.

Pep Boys said it had no immediate plans to launch a search for a permanent replacement, signaling that Odell's interim title might fade away in short order.

"The entire board is highly confident in Mike's ability to step seamlessly into the role of interim CEO," Pep Boys board chairman Bill Leonard said.

Analyst Cid Wilson of Kevin Dann & Partners L.L.C., of New York, said Odell was a good choice, though the unexpected changeover surprised the investment community.

"The community was very happy when they hired him on as chief operating officer," Wilson said.

Though Odell said he did not know change was afoot until two weeks ago, when Rachor told him he intended to leave, he said he felt well-prepared to fill his shoes.

"Jeff led us in putting together what we think is a very solid strategic plan, and he has put together a very good executive team," said Odell, who was to address the company's 500 home-office employees at a monthly "town hall" meeting this afternoon at headquarters.

Rachor hired Odell as his top lieutenant in September. Odell had been executive vice president and general manager of Sears Retail & Specialty Stores before joining Pep Boys.

Rachor also hired Scott Webb in September as senior vice president for merchandising and marketing. He brought Troy Fee to Pep Boys in July as senior vice president of human resources. Rachor was also instrumental in hiring the new CFO, Arthur, who oversaw the restructuring of operations at Toys R Us from 2004 to 2006.

"It was difficult for me to leave in kind of the third inning of the turnaround here," Rachor said. But he concluded that Odell and the team of new arrivals and Pep Boys veterans were in good shape to move ahead.

The management changes come as Pep Boys attempts to recover from several years of poor financial performance and administrative turmoil that included a board shake-up in 2006 led by activist shareholders.

It was during that board shake-up that the revolving door into the CEO's office began to twirl.

The $2.3 billion company has lost money in four of the last five years, and its stock price has dropped as its sales slid. Share prices rose sharply after Rachor joined the company early last year, but the stock has tumbled 60 percent in the last 10 months. It closed today at $9.05, down 1.09 percent.

In November, the company introduced to Wall Street a five-year strategic turnaround plan that seeks to restore profitability to the chain, which sells auto parts, accessories and auto-repair service.