CarMax is America's largest used-car retailer and a Fortune 500 company. The corporate entity behind the formation of CarMax was Circuit City Stores, Inc. The first CarMax used-car store opened in September 1993, from Circuit City's corporate offices in Richmond, Virginia. As of November 30, 2018, CarMax operated 195 locations in 95 television media markets. While CarMax stores focus on marketing used vehicles, the company acquired its first new car franchise with Chrysler Corporation in 1996. By 1999, it added new vehicle franchises for Mitsubishi Motors, Toyota, and Nissan as well. As of November 2018, the only CarMax new vehicle dealerships that remain are the two Toyota stores located in Kenosha, Wisconsin and Laurel, Maryland.
Concept
The concept for CarMax was developed by Circuit City executives under then-CEO Richard L. Sharp. It was developed for nearly a year in 1991, using the code name "Project X", and was also known as "Honest Rick's Used Cars" to those intimately involved in the skunk works team. The concept was actually first proposed by Ronald L. Moore of Richmond, Virginia, a consultant hired by Circuit City to evaluate possible business opportunities beyond the scope of their consumer electronics locations. Prior to the first store being built, DeVito/Verdi was hired as the advertising agency and creative resource. The company executed the campaign and additional TV advertisements over the course of a number of years in support of the launch and the initial wave of stores. The business model began with no fees, however the model was subsequently abandoned for the current business model after it was determined that customers were not concerned about paying transaction fees for the purchase of a vehicle. A typical CarMax store is approximately, carries an inventory of 300-400 vehicles, and turns its inventory over eight to ten times a year. On average, a CarMax location employs 40 sales associates. Each car goes through a thorough 125-point inspection process, beyond any state-required inspections, and includes a 90-day warranty, three days to change your financing for free, and a seven-day money back guarantee. Circuit City issued the first CarMax stock in February 1997, when CarMax had seven locations. Initially, the stock was a tracking stock still under the umbrella of the Circuit City. CarMax officially split from Circuit City as of October 1, 2002, when it was spun off as a stock dividend for Circuit City shareholders, with shares also issued to those holding CarMax tracking stock. During the 12-month period ending February 28, 2018, the company sold 721,512 used cars at retail. According to the CarMax fiscal year 2018 report released on April 24, 2018, the company opened 15 used car superstores in Fiscal Year 2018, and expects to open 15 additional stores in Fiscal Year 2019. CarMax was on Fortune's "100 Best Companies to Work For" list from 2005 to 2018, placing 34th in 2018. In 2020, Fortune ranked CarMax at number 20 on their Fortune List of the Top 100 Companies to Work For in 2020 based on an employee survey of satisfaction.
