Circuit City restructures, spins off CarMax unit

Heller, Laura
March 2002
DSN Retailing Today;3/11/2002, Vol. 41 Issue 5, p3
Trade Publication
The middle of February 2002 took Richmond, Virginia-based retailer Circuit City, on a closing share price of $16.56, an overnight drop of 30%, or nearly 46% less than its 52-week high of $31 reported only weeks earlier on January 9, 2002. By the end of the month, the stock had rebounded slightly to $17.88 per share. Fueling the plunge was a myriad of mixed news not the least of which was the announcement that the retailer was spinning off its CarMax unit into a stand-alone company called CarMax Inc., as well as pursuing another remodeling program. CarMax has performed adequately as the business has matured and more cost-conscious customers buy used rather than new cars due to economic conditions. To this end, the company announced it would result 300 stores this year to house a new video department designed to better showcase the high-growth TV category complete with seating area for the full home theater experience, In addition, each of the 300 stores will receive a new lighting package in line with those installed in all new stores reflecting the company's newest format that was unveiled in Jacksonville, Florida, in August 2000.


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