A slowing national economy might seem like a tough time to open new retail locales selling big-ticket items such as cars, but that hasn't stopped CarMax Inc., the publicly traded used-vehicle dealer that set up its first Charleston outlet, and 94th store nationwide, this week.
The business held a "soft" opening Wednesday, then officially rolled out the 65-employee dealership at 712 Savage Road, at Savannah Highway, on Thursday. The fete had a visit from top company officials, including its 42-year-old president and chief executive, Tom Folliard.
"We have changed the way consumers buy cars," Folliard said Thursday.
CarMax now has three stores in South
Carolina. Its newest outlet, which is holding a grand opening Saturday, joins existing centers in Greenville and Columbia. It has 13,000 square feet of interior space, including a showroom and parts department. A covered drive-up lane connects the six-bay service center to customer waiting area with a supervised room for kids.
Outside, the store lot has 250 to 350 used cars grouped by type of vehicle and by model. Most brands are represented, including Audi, BMW, Mercedes-Benz, Ford, Dodge, Jeep, Lincoln, Cadillac, Suzuki, Honda, Hyundai and Nissan. Vehicles that aren't on the lot can be transferred to Charleston or ordered online at www.carmax.com.
CarMax touts low "no-haggle" prices, where buyers pay what's on the sticker. Most of its vehicles are 1 to 6 years old, have less than 60,000 miles, are backed by a limited 30-day warranty, and are guaranteed not to have flood or frame damage or odometer or title issues. The company pledges to buy any car whether or not the seller purchases a CarMax vehicle.
The formula has had generally good success since CarMax's start in 1993 in Richmond, Va. Today the chain has stores in 43 markets in 22 states.
According to company figures, CarMax sales grew steadily from $2.2 billion in 2000 to $7.5 billion in 2007, and net earnings rose from $1.1 million to $198.6 million over the same period.
Earnings in its most recent quarter ending Feb. 29 dropped 48 percent from the year before as problem loans in the company's finance arm dragged down profits, said Trina H. Lee, spokeswoman.
Company sales continue to increase, and CarMax is expanding into several other new markets this year — Tulsa, Okla.; Huntsville, Ala.; and Colorado Springs, Colo.
"We are adding enough to grow the store base by 15 percent a year," Lee said, off a bit from long-term growth estimates of 20 percent.
Folliard, who has been involved with the company since its early days, makes a point of attending all new store openings to keep in touch with employees. He met with CarMax staffers in Charleston for about an hour before the official opening event, Lee said.
CarMax's stock, which is traded on the New York Stock Exchange, closed Thursday at $20.77 a share, up 9 cents. It has risen more than 15 percent in the past month.