Circuit City electronics sales rise, while auto business lags Its CarMax Group will own and operate U.S. Nissan franchises

May 07, 1998|By BLOOMBERG NEWS

RICHMOND, Va. -- Circuit City Stores Inc. said April sales at its electronics stores exceeded expectations, though sales at its CarMax Group auto retailing stores open at least a year fell 9 percent.

Separately, CarMax said it signed an agreement to own and operate Nissan Motor Corp. franchises throughout the United States, further expanding its new-car retailing business. CarMax is 77 percent-owned by Circuit City, the leading U.S. appliance and electronics retailer.

Circuit City said sales at stores open at least a year in April rose 1 percent, reflecting strong sales of digital satellite systems, cellular phones and pagers, video-cassette recorders, camcorders, music software and major appliances. The chain's total sales rose 10 percent to $520.8 million.

Circuit City, though, has been hurt by wider-than-expected losses at CarMax, which operates 19 auto superstores, including two with new-car franchises. The CarMax losses stemmed in part from continued strong promotions by automakers for new-car sales in the United States and lower-than-expected sales from its newer stores.

April sales at CarMax stores were below expectations, mainly because of the loss of a weekend sales day as Easter Sunday fell in April, as well as lower retail prices. Last year, Easter was in March. CarMax's new-car sales remained healthy, the company said.

Under the agreement with Nissan, CarMax can acquire existing Nissan franchises and obtain new franchise points. Nissan franchises may be opened at CarMax superstores or operated separately.

CarMax said it will open a U.S. Nissan dealership at a superstore scheduled to open next spring in Carson, Calif.

Pub Date: 5/07/98

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