CSK Auto and Advance Auto Parts Partner With Sequoia Capital to Launch PartsAmerica.com, Largest Auto Parts Site With National Distribution.
PHOENIX, Az./ROANOKE, Va.--(BUSINESS WIRE)--Jan. 10, 2000
CSK Auto Inc. (NYSE: CAO), Advance Auto Parts and Sequoia Capital, a leading venture capital firm, announced today that they have signed a definitive agreement to form a new company, PartsAmerica.com, which is expected to become the largest automotive parts and accessories e-commerce destination in the $90 billion automotive parts and accessories market. PartsAmerica.com will serve both the consumer and commercial markets.
Advance Auto Parts, based in Roanoke, Va., is a retailer of automotive parts and accessories through more than 1,600 stores in 37 states, located primarily in the eastern and midwestern regions of the United States, Puerto Rico and the Virgin Islands.
CSK Auto, based in Phoenix, Az., is a retailer of automotive parts and accessories through more than 1,100 stores located primarily in the western United States operating under the trade names of "Checker Auto Parts", "Schuck's Auto Supply" and "Kragen Auto Parts".
Unlike "virtual websites" relying on a patchwork of automotive part wholesalers, PartsAmerica.com will leverage the existing infrastructure of over 2,700 CSK Auto and Advance Auto Parts stores in 50 states, as well as their 3,000 delivery vehicles and 59 state-of-the-art distribution facilities to the benefit of PartsAmerica.com customers. CSK Auto and Advance Auto Parts' combined annual marketing budget of more than $100 million, along with the 4 million customers that visit their stores weekly, will give vast exposure to the PartsAmerica.com brand name. Additionally, PartsAmerica.com customers will benefit from prompt delivery and competitive pricing based on the availability of Advance Auto Parts and CSK Auto's more than $1 billion in inventory and their unparalleled buying power.
PartsAmerica.com will offer both retail and commercial customers the widest available selection of automotive parts and delivery options, including same-day delivery, local in-store pickup, and overnight shipment. In addition, because of the 50-state coverage, customers will be able to return or exchange merchandise at their local CSK or Advance Auto Parts store. Prior to the PartsAmerica.com official launch date, customers can order parts and accessories through CSK Auto's existing e-commerce site, cskauto.com, which will be incorporated into PartsAmerica.com.
CSK Auto and Advance Auto Parts will own equal stakes in PartsAmerica.com. Sequoia Capital will be the lead investor with additional funding from CSK, Freeman Spogli & Co., Sears, Roebuck & Co. (NYSE:S) and Ripplewood Holdings LLC.
Maynard Jenkins, Chief Executive Officer of CSK, commented: "This joint venture represents another important step in the implementation of CSK's Internet strategy. Great distribution will be the critical factor in determining who the winners are in e-commerce. With a presence in 50 states, PartsAmerica.com will be able to serve customers anywhere in the United States on a same-day basis and allow them to interact with our combined store base, giving it a significant advantage over Internet-only businesses."
"This industry is ripe for our entrance," he added, "because a significant number of auto parts buyers have access to the Internet and have made a purchase online."
Advance Auto Parts' Chief Executive Officer Garnett Smith said, "As the Internet becomes an important distribution channel for traditional retailers, Advance and CSK have a clear advantage in the auto parts category. We already have in place the extensive logistics and infrastructure required to handle the large variety of auto parts in demand by customers."
Tom Stephenson, a Sequoia Capital partner, said, "Our investment in PartsAmerica.com represents our first partnership with bricks and mortar retailers in the U.S. We're confident that PartsAmerica.com's business model is far superior to any option that exists for the consumer today."
Sequoia Capital is a leading Silicon Valley venture capital firm with a strong record of funding successful Internet companies, such as Yahoo (www.yahoo.com), Etoys (www.etoys.com), Scient (www.scient.com) and Webvan (www.webvan.com).
Advance Auto Parts is the trade name for Advance Stores Company, Incorporated, a wholly owned subsidiary of Advance Holding Corporation. Advance Holding Corporation's primary shareholders are: Freeman Spogli, a leading private investment firm based in Los Angeles and New York, with extensive experience in retail and in direct marketing; Sears and Ripplewood Holdings, a private investment company.
CSK Auto, publicly traded on the New York Stock Exchange under the symbol "CAO", is approximately 40% owned by Investcorp and affiliates of the Trump Group. Investcorp is a leading global investment group with offices in New York, London and Bahrain. The Trump Group is a leading private investment firm based in Miami. Investcorp and the Trump Group have extensive experience in retail and Internet investments.
Note: This press release contains forward-looking statements, which involve risks and uncertainties. It discusses, among other things, expected growth, future business strategies and future performance. Actual results could differ materially from those anticipated in these forward-looking statements. Factors that might cause or contribute to such differences include, among others, competitive pressures, the growth rate of the Internet, constantly changing technology, the state of the economy, inflation, consumer debt levels and market acceptance of the company's products and services.
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|Date:||Jan 10, 2000|
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