CarMax buying $50M minority stake in Edmunds

Marketing

Used-vehicle retailer CarMax Inc. is investing $50 million to buy a minority stake in Edmunds, the automotive retail research and vehicle-listing company.

CarMax said Wednesday the move is mean to bolster its omnichannel retail strategy designed to meet and interact with shoppers wherever and however they’re shopping, across multiple channels, online and in store.

“Edmunds’ proprietary content, comprehensive automotive market insights and streamlined user experience across the car buying and selling journey will allow us to deepen our engagement with customers shopping online,” Bill Nash, CarMax president and CEO, said in a statement.

CarMax is expected to complete its rollout of the omnichannel strategy, which it is calling a “personalized buying experience,” by the end of February 2021, although most of its markets will be covered in some form by the end of February 2020.

The announcement follows Edmunds’ plans to eliminate 129 jobs by March. Those cuts are part of a restructuring that it said follows a series of strategic moves to reposition the business.

Of the job reductions, 122 will be at Edmunds’ Santa Monica, Calif., headquarters, triggering notification to the state under the federal Worker Adjustment and Retraining Notification, or WARN, Act. Another seven are at a satellite office in Detroit.

Edmunds employed more than 550 people prior to the job cuts announced this month. The company said it doesn’t disclose the number of employees who work out of each location.

The company did not elaborate on the reasons for the restructuring. In an emailed statement Tuesday, Jamie Epstein, vice president of employment experience for Edmunds, told Automotive News that Edmunds needs “more time and preparation” to evolve the business “to transform the way we serve clients and consumers in a performance oriented way.”

The restructuring, she added, “will refocus the company on its core revenue drivers so that we are in the most financially healthy spot for future growth.”

Edmunds, a third-party vehicle listings site, offers shoppers the ability to review vehicles and pricing information. Its history dates to the 1960s, when it produced printed vehicle pricing guides.

Edmunds declined to quantify how large a stake CarMax has acquired.

“We’re excited for this opportunity to collaborate with another well-respected industry leader that is dedicated toward making car shopping easier for consumers,” Edmunds CEO Avi Steinlauf said in a news release. “With our expanded resources and capabilities, we’re confident this will be a mutually beneficial partnership for many years to come.”

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