CarMax 2000 Annual Report Download - page 5

CIRCUIT CITY STORES, INC.
In fiscal 2001,we will add or improve displays
for the newer technologies in all stores nation-
wide. These improvements will help ensure
that we are in the best position to capture the
sales opportunity presented by the digital cycle.
We also will remodel 30 to 35 stores in central
and south Florida and in Richmond,Va., pro-
viding easier access to self-service products
and expanding our assortments in key areas.
CARMAX: A STEADY FOCUS AND
STEADY PROGRESS
At CarMax,we slowed geographic growth in fiscal
2000 to concentrate on improving operations and
profitability. With comparable store sales growth
in our used-car business at year-end,our first
annual profit and a strong finish,we surpassed
our financial goals for the year. The marked
operating improvement is particularly signifi-
cant because it came from our core used-car
superstores
, including those with integrated
new-car franchises. The improvement reflects:
• ongoing productivity improvements in sales
and operations;
• better results from the profit improvement
plan initiated at the end of fiscal 1998;
• our hub and satellite operating strategy;
• the continued integration of new-car fran-
chises with our used-car superstores; and,
• the exit of a significant competitor from the
used-car superstore business.
As we enter fiscal 2001,we continue to devote
our energies to our existing markets. Transforming
the car-buying experience to make it dramatically
easier for the consumer remains the cornerstone
of the CarMax concept. CarMax locations in
single-store markets and in the Atlanta and
Washington/Baltimore multi-store markets are
producing outstanding results consistent with
their history and our initial expectations for
the CarMax concept. Our used-car locations
also have proven to be strong traffic drivers for
new-car franchises.
In south Florida, Texas and Chicago, we believe
that we can further improve our results with
increased consumer awareness and additional
satellite stores, including two prototype stores
opened late in fiscal 2000. We also are seeking
appropriate opportunities to integrate new-car
franchises with existing used-car superstores.
CarMax is aggressively leveraging the opportu-
nities of the Internet. At the end of fiscal 2000,
we introduced a redesigned CarMax Web site
that provides online access to all the vehicle
information available at our stores. Consistent
with our commitment to service,carmax.com
offers dedicated Internet sales consultants for
customers who want to buy online. Recognizing
that consumers use a variety of well-known
Internet resources to research purchases,
CarMax also is testing relationships with the
leading automotive sites. These services can be
nationwide mechanisms for building CarMax’s
consumer awareness.
In fiscal 2001,we will focus on growing sales in
existing markets. Significant opportunities
remain in these markets,and we believe that a
continued focus on maximizing these opportu-
nities should yield solid profitability for CarMax.
LEADERSHIP CHANGES
In December,we announced a succession plan
as we prepared for me to leave the day-to-day
operations of the company. Effective in June 2000,
Alan McCollough,currently president and chief
operating officer,will add the title of chief execu-
tive officer. In his expanded role,Alan will lead
our Circuit City and CarMax businesses. Alan is a
12-year Circuit City veteran. As general manager
of corporate operations,president of our central
operating division and senior vice president of
merchandising,Alan gained extensive experience
in the two principal operating components of our
business
— store operations and merchandising.
He was named to his present position in March
1997. Alan’s experience,his intense commitment
to customer service and the support he engen-
ders among our Associates and our vendors will
help him to ensure that the company maximizes
the exciting opportunities ahead.
Other management changes include the pro-
motion last summer of Philip Dunn to senior
vice president. Phil joined Circuit City in 1984.
He was named treasurer in 1991,was promoted
to vice president in 1992 and added the title of
controller in 1996.
As I conclude fiscal 2000 and my tenure as chief
executive officer of Circuit City Stores,I believe
that the company is well positioned for the
future. By focusing on the consumer and devel-
oping a truly outstanding team of Associates,we
have built a company with the financial strength
to perform extraordinarily well in good times
and to more than weather the down cycles. Our
Circuit City and CarMax Associates are talented
and enthusiastic. I would like to express my
deepest appreciation to them and their families,
our shareholders,our vendors and our customers
for their support.
Sincerely,
Richard L.Sharp
Chairman and Chief Executive Officer
Circuit City Stores, Inc.
April 6,2000
CIRCUIT CITY STORES, INC. 2000 ANNUAL REPORT 3