CarMax Inc. aims to expand and to open up to 55 used-car stores through February 2016, a 50-percent climb in store count. Based in Richmond, Va., Carmax announced that its net earnings and revenues increased in the quarter that ended Nov. 31, 2011.
The used-car retailer said that there was a slight dip in the unit sales of used cars and trucks in the quarter. The most affected stores are those that had been open for at least one year. According to CarMax Chief Executive Officer Tom Folliard, the company aims to open 10 CarMax stores in its fiscal year that starts March 1, 2012.
In particular, it hopes to open 10 to 15 new stores in each of the three coming fiscal years. CarMax currently runs 107 used-car stores in 50 markets. Folliard told analysts on a conference call made recently that if the situation doesn’t get worse, it will persist in managing its business the same manner that it has when it comes to efficiencies and margins. This would be its growth plan.
However, the company will “cut back” if the conditions become worse. He said that with an improvement, there would have to be a range to cover that. Folliard said that around half of the new stores will be produced in new markets while the other half will be made in markets that already have CarMax stores.
He said that the next 10 stores will be in the following areas: Chattanooga and Nashville, Tenn.; Lancaster, Pa.; Bakersfield and Oxnard, Calif.; Fort Myers and Naples, Fla., and Des Moines, Iowa. There will also be two stores to open in Denver, Colo. He declined to say what the other locations are.
Headquartered in Richmond, Virginia, CarMax is considered as the largest used-car retailer in the United States. CarMax started as a concept proposed by a consultant tapped to assess possible business opportunities beyond Circuit City’s scope. It was then developed under the code name "Project X" by Circuit City executives under Richard Sharp. The company was eventually established in 1993 as a subsidiary of Circuit City.
The first CarMax store opened its doors in September 1993, which is less than two miles away from the corporate offices of Circuit City in Richmond, Virginia. In October 2002, CarMax officially split from Circuit City, when it was spun off as a stock dividend for Circuit City shareholders. In 2010, CarMax was a Fortune 500 company, ranking 323rd.