Automotive Parts Company
AutoZone headquarters in Memphis, Tennessee
|Founded||July 4, 1979; 42 years ago (1979-07-04) (as Auto Shack)|
Forrest City, Arkansas, U.S.
|Headquarters||Memphis, Tennessee, U.S.|
Number of locations
William C. Rhodes III
(Chairman, President, & CEO)
William T. Giles
|Products||Automotive parts and accessories|
|Revenue||US$12.631 Billion (Fiscal Year Ended August 29, 2020)|
|US$2.417 Billion (Fiscal Year Ended August 29, 2020)|
|US$1.732 Billion (Fiscal Year Ended August 29, 2020)|
|Total assets||US$14.423 Billion (Fiscal Year Ended August 29, 2020)|
|Total equity||-US$877.977 Million (Fiscal Year Ended August 29, 2020)|
Number of employees
|Footnotes / references|
AutoZone, Inc. is an American retailer of aftermarket automotive parts and accessories, the largest in the United States. Founded in 1979, AutoZone has over 6,400 stores across the United States, Mexico, Puerto Rico, Brazil and the US Virgin Islands. The company is based in Memphis, Tennessee.
Originally a division of Memphis-based wholesale grocer Malone & Hyde, the company was known as Auto Shack. After the sale of the grocery operation to the Fleming Companies of Oklahoma City, Oklahoma, the name of the company was changed to AutoZone to reflect the new focus and to settle a lawsuit brought by Tandy Corporation for infringing on Tandy's "Radio Shack" trademark.
On July 4, 1979, the first store opened in Forrest City, Arkansas under the name of Auto Shack. Doc Crain was the store's first manager. Sales that first day totaled $300.00.
In 1981, Express Parts or VDP is implemented to get the customers hard to find parts by special ordering them through wholesalers. Total stores was 73 in 7 states.
In 1984, the company became the first auto parts retailer to create a quality control program for its parts. Total stores was 194 in 13 states.
In 1985, Doc Crain coined the term WITTDTJR, which stands for "What it takes to do the job right." Total store count is 263 in 14 states. Peter Formanek stepped in as president. He oversaw the auto parts firm's daily operations and worked on growth strategy.
By 1986, expansion had made the company grow into a large store chain across the South and the Midwest. That year, Darren Reltherford, manager of Auto Shack's Memphis, Tennessee store, received the first Extra Miler award, which has since been given to AutoZoners who show their dedication to customer satisfaction by "going the extra mile" for customer service. The Duralast line of alternators and starters is released. The Loan-A-Tool program begins allowing customers the ability to borrow specific tools for jobs. The 4th Distribution Center in Greenville, South Carolina opens. Total of stores is 339 in 15 states.
In 1987, Auto Shack officially changed its name to AutoZone. The first AutoZone store was in Enid, Oklahoma. That year also, the company introduced WITT-JR, an electronic catalog used to look up parts and keep warranty information. Total of stores is now 459 in 16 states.
In 1989, the company began using a computerized store management system (SMS). The Duralast battery line is released consisting of Sub-Zero, Desert and long life. Total of stores is 513 in 17 states.
In 1991, its stock began trading on the New York Stock Exchange using the ticker symbol "AZO." It opened up at $27.50 a share. The 5th DC opens in Lafayette, Louisiana. The company also became the first auto parts retailer to register customer warranties in a computer database.
In 1994, AutoZone began using satellites to facilitate communication between stores and the corporate office. Sales hit $1.5 billion.
In 1995, AutoZone opened its 1,000th store in Louisville, Kentucky. Also, the Duralast trademark made its debut with the Duralast and Duralast Gold batteries. Total of stores is now 1,143 in 26 states.
1996 was the year when the Internet era arrived at the company, when AutoZone opened its company Web site. The new commercial program debuted in Germantown, Tennessee. ALLDATA, a software company based in Elk Grove, California that provides automotive diagnostic and repair information, was acquired.
Company founder Pitt Hyde retired as chairman and CEO in 1997. John Adams became the new chairman and CEO.
In 1998, AutoZone acquired ADAP Inc. Who had stores under the ADAP Discount Auto Parts and Auto Palace nameplates respectively, both being auto parts chains in the northeastern United States with 112 stores, TruckPro L.P., a chain with 43 stores in 14 states, and the 560-store Chief Auto Parts Inc., a chain with a presence in 5 states. At the commencement of fiscal 1999, AutoZone made another acquisition by purchasing 100 Express stores from The Pep Boys—Manny, Moe & Jack. The company began a process of internationalization with their first store abroad, which opened in Nuevo Laredo, Mexico. AutoZone closed the 1990s by debuting at the Fortune 500 list in 1999.
Steve Odland became AutoZone's third CEO in 2001. Also in 2001, AutoZone sold TruckPro to Paratus Capital Management.
In 2002, AutoZone developed a network of "hub, feeder, and satellite" stores to have more product in the market area, while reducing inventory investment. Sales hit $5.33 billion.
In 2003, the Duralast tool line was introduced. This was a year of important negotiations for AutoZone, as the company partnered with other important auto parts industry companies, such as CarMax and Midas. AutoZone de Mexico opens the first DC in Nuevo Laredo, Mexico. Total stores number 3,219 in 48 states and 49 in Mexico. In 2004, founder J.R. "Pitt" Hyde III was inducted into the Automotive Hall of Fame.
In 2005, William C. Rhodes III was named president and CEO. Steve Odland left to become the chairman and CEO of Office Depot.
In 2007, Bill Rhodes, then 42, was named chairman, president and chief executive officer of AutoZone, Inc. on June 6.
In 2008, AutoZone opened their 4,000th store in Houston, Texas. Sales hit $6.2 billion.
On December 15, 2011, ALLDATA LLC, an operating unit of AutoZone, expanded its direct presence in Canada to better serve its growing customer base.
On August 17, 2012, AutoZone expanded into their 49th state Alaska by opening their 5,000th store in Wasilla, Alaska
In 2012 AutoZone opened their first store in Brazil.
In December 2012, AutoZone purchased AutoAnything.com, an ecommerce leader in aftermarket automotive parts based in San Diego, California.
By April 2017, AutoZone had been the largest retailer of automotive parts in North America for three consecutive years. As of August 2017, AutoZone had 5,465 locations in the United States, 524 locations in Mexico, and 46 locations in Brazil, for a total of 6,035.
On October 22, 2018, Pitt Hyde announced that he would be stepping down from AutoZone's board of directors.
AutoZone is incorporated in the state of Nevada.
Since October 1995, AutoZone has been headquartered in its J.R. Hyde, III Store Support Center (SSC), a 270,000-square-foot (25,000 m2), eight-story building in DowntownMemphis, Tennessee. As of 2013 there were over 1,200 employees there.
The project manager of the building's construction was Rob Norcross, a principal at LRK Inc. The building has the capability to withstand a 9.0 magnitude earthquake because it has a special base isolation system that had a price tag of $950,000.
Valucraft, Duralast, and Duralast Gold are AutoZone's private label brands for lead-acid automotive batteries (manufactured primarily by Johnson Controls, but also East Penn, Exide, and other manufacturers). Duralast Platinum is an AGM line of batteries. AutoZone also sells tools under the Duralast brand which carry a lifetime warranty.
Brake pad labels include (ranging from least to most expensive):
- Duralast - OEM-like performance; semi-metallic or organic.
- Duralast Gold - OEM design and performance; semi-metallic or ceramic.
- Duralast Max (in the process of being phased out) - superior to OEM design and performance; ceramic.
- Duralast Elite (currently being introduced selectively by market) - superior to OEM design and performance; ceramic; copper-free.
- Duralast GT Street - performance pads for select applications.
Valucraft pads are being phased out, as of early 2015. Duralast GT Street pads introduced early 2018.
The Valucraft, Duralast, and Duralast Gold names are used on various other parts and accessories as well.
Duralast Elite pads were first trademarked  and began being introduced to select markets in early 2020.
AutoZone's 6,000+ retail outlets throughout the United States, Mexico and Brazil stock a variety of aftermarket parts as well as some OEM parts. All AutoZone stores are corporately owned; the company does not have franchise operations.
In 2004, AutoZone celebrated its 25th anniversary and announced a corporate sponsorship agreement with auto racing association NASCAR.
In 2007, AutoZone sponsored Kevin Harvick and Timothy Peters in the NASCAR Busch Series.
AutoZone holds the naming rights to the downtown Memphis baseball stadium that is the home of the Memphis Redbirds of the Pacific Coast League. The company also sponsors the AutoZone Liberty Bowl. The AutoZone Liberty Bowl, alongside the College Football Playoff Foundation donated $250,136.03 to the St. Jude Children's Research Hospital. The AutoZone Liberty Bowl awarded 2018's Distinguished Citizen Award to Priscilla Presley.
They are an official sponsor of Bellator MMA, the world's second largest Mixed Martial Arts promotion.
AutoZone paid $3.3 million to settle a lawsuit to the families of a family who was killed due to being rear-ended by an AutoZone-owned truck. The suit alleges that AutoZone was negligent in training the driver of the truck.
AutoZone faced a lawsuit for gender discrimination in which the plaintiff alleged that men treated her differently when she was promoted and that she feared revealing a pregnancy to her superior. When the pregnancy was discovered, she alleges that her district manager pressured her to step down from her position. She was demoted in February 2006 and fired in November 2011. The jury on the case ruled in 2014 in favor of the plaintiff, awarding her $185 million in punitive damages as well as approximately $873,000 in back wages. AutoZone has announced its intention to appeal the verdict.The Wall Street Journal's Jacob Gershman suggested that the verdict would be scaled back, noting that the jury verdict is not the end-all be-all.
A Georgia woman was fired after a customer insulted her and used multiple racial epithets against her. She alleges that the district manager told her to "suck it up," and she is filing a lawsuit against AutoZone for violating her civil rights.
AutoZone came under fire from allegations that a district manager had told an employee to remove a flag displayed on the company's premises for the sake of improved diversity. AutoZone denies that and claimed that it was the poor means by which the flag was put up, with duct tape and suction cups.
In June 2019 AutoZone entered into an $11 million settlement against with the State of California to resolve allegations that the company had violated state laws governing hazardous waste, hazardous materials, and confidential consumer information. AutoZone is charged with illegally disposing of millions of hazardous waste items, including used motor oil and automotive fluids, at landfills not authorized to accept hazardous waste.
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- ^United States Court of Appeals, Sixth CircuitArchived November 25, 2010, at the Wayback Machine
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- ^"AutoZone To Acquire Auto Palace". PRNewswire. January 14, 1998.
- ^"AutoZone continues growth with Auto Palace purchase". The Auto Channel. February 1998.
- ^O'Dell, John (May 12, 1998). "AutoZone to Acquire Car Parts Rival Chief". Los Angeles Times.
- ^O'Dell, John (July 1, 1998). "AutoZone Purchase of Chief Auto Is Complete". Los Angeles Times.
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- ^"Automotive Hall of Fame: A night for legends". autonews.com. 2004-10-11. Retrieved 2021-02-03.
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- ^"AutoZone, Form 8-K, Current Report, Filing Date Jun 7, 2007". secdatabase.com. Retrieved Jan 18, 2013.
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- ^"ALLDATA Expands Its Presence in Canada". ALLDATA Automotive Intelligence. 15 December 2011. Retrieved 14 January 2020.
- ^Zacks Equity Research (16 December 2011). "AutoZone Expands in Canada". Yahoo! Finance. Retrieved 14 January 2020.
- ^ ab"AutoZone, Form 8-K, Current Report, Filing Date Dec 4, 2012". EDGAR. SEC. Retrieved Jan 18, 2013.
- ^"AutoZone, Form 10-Q, Quarterly Report, Filing Date Dec 13, 2012"(PDF). EDGAR. SEC. Retrieved Jan 18, 2013.
- ^Adams, Bruce (April 25, 2017). "AutoZone again claims No. 1 spot in Top 25 Auto Chain Report". SearchAutoParts.com. Retrieved April 13, 2018.
- ^"Pitt Hyde to step down from AutoZone board". Commercial Appeal. October 22, 2018. Retrieved November 12, 2018.
- ^ ab"AutoZone HQ holds title as most earthquake-resistant Memphis building." Memphis Business Journal. May 13, 2011. Retrieved on December 6, 2014.
- ^"Store Support Center." AutoZone. Retrieved on June 4, 2013.
- ^"Duralast Tools". AutoZOne. Retrieved November 12, 2018.
- ^"DURALAST ELITE™ BRAKES". AutoZone.com. Retrieved October 9, 2020.
- ^"Duralast Elite Application #90142313". USPTO Report. Retrieved October 9, 2020.
- ^About Us: Our Company, Our Culture AutoZone Official Site
- ^"College Football Bowl Scene Changes, But AutoZone Liberty Bowl Endures". memphisdailynews.com.
- ^Van Tuyl, Chris (November 11, 2018). "St. Jude children's hospital, WINGS get generous donations". Commercial Appeal. Retrieved November 12, 2018.
- ^Maxey, Ron (April 8, 2018). "Priscilla Presley named AutoZone Liberty Bowl's 2018 Distinguished Citizen". Commercial Appeal. Retrieved November 12, 2018.
- ^Tepfer, Daniel (July 19, 2018). "AutoZone pays $3.3 million for Bridgeport family's deaths". CT Post. Retrieved November 12, 2018.
- ^London, Christina; Nguyen, Candice (November 17, 2014). "AutoZone Ordered to Pay $185M in Discrimination Suit". NBC San Diego. Retrieved November 12, 2018.
- ^Gershman, Jacob (November 19, 2014). "$186 Million AutoZone Verdict is Eye-Opening, but Unlikely to Stick". The Wall Street Journal. Retrieved November 12, 2018.
- ^Northam, Mitchell (January 24, 2018). "AutoZone worker: Customer unleashed racist tirade — and I got fired". AJC. Retrieved November 12, 2018.
- ^Lacapria, Kim (September 2, 2016). "AutoZone Flag Removal". Snopes. Retrieved November 12, 2018.
- ^Becerra, Xavier (June 18, 2019). "Attorney General Becerra Announces $11 Million Settlement against AutoZone for Illegal Disposal of Hazardous Waste Statewide". California Attorney General. Retrieved June 19, 2019.
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Coordinates: 35°08′32″N90°03′22″W / 35.14231°N 90.05614°W / 35.14231; -90.05614
|1,738.31|| +20.76 / +1.21%|
AutoZone, Inc. engages in the retail and distribution of automotive replacement parts and accessories. The firm offers ALLDATA, which produces, sells and maintains diagnostic and repair information software used in the automotive repair industry and E-commerce, which includes direct sales to customers. The company was founded by Joseph R. Hyde, III on July 4, 1979 and is headquartered in Memphis, TN.
|Mutual fund holders||49.83%|
|William C. Rhodes||Chairman, President & Chief Executive Officer|
|Jamere Jackson||Chief Financial Officer & Executive Vice President|
|Thomas B. Newbern||EVP-International & Information Technology|
|K. Michelle Borninkhof||Chief Information Officer & Senior Vice President|
|Charlie Pleas||Senior Vice President & Controller|
|Mr. William C. Rhodes III||Chairman, Pres & CEO||4.17M||19.04M||1965|
|Mr. Philip B. Daniele||Exec. VP of Merchandising, Supply Chain & Marketing||844.11k||N/A||1969|
|Mr. Thomas B. Newbern||Exec. VP of International, Information Technology & ALLDATA||1.42M||8.22M||1962|
|Mr. Mark A. Finestone||Exec. VP of Strategy & Innovation||1.44M||N/A||1961|
|Mr. Jamere Jackson||CFO, Exec. VP - Fin. & Store Devel. and Customer Satisfaction||N/A||N/A||1969|
|Brian L. Campbell||VP of Tax, Treasury & Investor Relations||N/A||N/A||N/A|
|Ms. Kristen Collier Wright||Sr. VP, Gen. Counsel, Sec. & Customer Satisfaction||N/A||N/A||1976|
|Mr. Richard C. Smith||Sr. VP of HR & Customer Satisfaction||N/A||N/A||1964|
|Mr. Albert Saltiel||Sr. VP of Marketing, E-Commerce & Customer Satisfaction||N/A||N/A||1964|
|Mr. Domingo JosÃ© Hurtado RodrÃguez||Sr. VP of International & Customer Satisfaction||N/A||N/A||1962|
Amounts are as of December 31, 2020 and compensation values are for the last fiscal year ending on that date. Pay is salary, bonuses, etc. Exercised is the value of options exercised during the fiscal year. Currency in USD.
AutoZone, Inc. retails and distributes automotive replacement parts and accessories. The company offers various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Its products include A/C compressors, batteries and accessories, bearings, belts and hoses, calipers, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, starters and alternators, thermostats, and water pumps. The company also offers maintenance products, such as antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, cabin, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers, as well as air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, stereos and radios, tools, and wash and wax products. In addition, it provides a sales program that offers commercial credit and delivery of parts and other products; and towing and tire repair services. Further, it sells automotive diagnostic and repair software under the ALLDATA brand through alldata.com and alldatadiy.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com. As of August 29, 2020, it operated 5,885 stores in the United States; 621 stores in Mexico; and 43 stores in Brazil. AutoZone, Inc. was founded in 1979 and is based in Memphis, Tennessee.
AutoZone, Inc.’s ISS Governance QualityScore as of September 26, 2021 is 5.The pillar scores are Audit: 3; Board: 8; Shareholder Rights: 4; Compensation: 7.
Corporate governance scores courtesy ofInstitutional Shareholder Services (ISS). Scores indicate decile rank relative to index or region. A decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk.
About AutoZone, Inc.
AutoZone, Inc. (AutoZone) is a retailer and distributor of automotive replacement parts and accessories in the United States. The Company operates through the Auto Parts Locations segment. The Auto Parts Locations segment is a retailer and distributor of automotive parts and accessories through the Company's locations in the United States, Mexico and Brazil. AutoZone operates approximately 5,975 stores in the United States, 635 stores in Mexico and 47 stores in Brazil. The Company's stores carry product lines for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. AutoZone also sells the ALLDATA brand diagnostic and repair software through www.alldata.com. Additionally, AutoZone sells automotive hard parts, maintenance items, accessories, and non-automotive products through www.autozone.com and servs its commercial customers through www.autozonepro.com.
Auto & Truck Parts
William C. Rhodes
Chairman of the Board, President, Chief Executive Officer
Chief Financial Officer, Executive Vice President - Finance and Store Development, Customer Satisfaction
Mark A. Finestone
Executive Vice President – Merchandising, Supply Chain and Marketing, Customer Satisfaction
Thomas B. Newbern
Executive Vice President – Store Operations, Commercial, Loss Prevention and ALLDATA, Customer Satisfaction
Kristen Collier Wright
Senior Vice President – General Counsel & Secretary, Customer Satisfaction
2.25 mean rating - 24 analysts
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AutoZone, Inc. - Company Profile, Information, Business Description, History, Background Information on AutoZone, Inc.
Memphis, Tennessee 38103-3607
We rely on innovation as our fuel for growth and let others run on imitation. We make sure the objects in our rear-view mirror aren't closer than they appear because we keep moving faster. What's more, because we're constantly fine-tuning the business, we're squeezing more horsepower out of the same fuel-efficient engine. We're experts on getting more for less. We have to be, because when the rubber hits the road, a customer with grease up to his elbows will tell you he doesn't care about anything but the right part at the right price, right now. Yes, there are other places he could go for that. But he comes to AutoZone because we give him all of that plus a level of service that helps make that tough job a little easier. So when we say we're set on customer service, we're not just yanking your timing chain. It's the foundation of our culture, and it's ours alone. It's what drives us.
History of AutoZone, Inc.
The leading U.S. specialty retailer of automobile parts in the late 1990s, Memphis, Tennessee-based AutoZone, Inc., sells auto parts, maintenance items, and automotive accessories through more than 2,700 stores in 39 U.S. states and in Mexico. The retail chain offers both private-label products, including Duralast and Deutsch, and brand names. Geared primarily toward the do-it-yourself market, AutoZone also serves professional auto repair shops. AutoZone stores do not sell tires or provide repair service, but they do offer diagnostic testing for batteries, starters, and alternators. AutoZone sells heavy-duty truck parts through its subsidiary TruckPro L.P. and offers automotive diagnostic and repair software through ALLDATA Corp.
Rapid Development during the Early Years: Late 1970s-Early 1980s
Joseph R. Hyde III began working in his family's business, Malone & Hyde, Inc., immediately after graduating from college in 1968 at the age of 22. The company, a wholesale grocery business, had been founded by his grandfather in 1907. The younger Hyde expanded the family business considerably. He began with drug stores, founding Super D Drugs at age 26, and then moved on to sporting goods stores, supermarkets, and, finally, automobile parts stores.
Hyde's entry into the retail auto parts market came on July 4, 1979, when he opened his first store, named Auto Shack, in Forrest City, Arkansas. The company had 25 people on its payroll at the time. To support further expansion, Hyde opened a 12,000-square-foot warehouse in Memphis, and by the end of the first year seven more stores in Arkansas and Tennessee had made their debut.
The idea behind Auto Shack was straightforward. The company aimed to provide a wide selection of auto parts at a low price to do-it-yourselfers--what it referred to as the DIY market. In addition to these customers, the company identified a pool of potential buyers as 'shade tree mechanics,' that is, those who worked on other people's cars in their spare time as a source of extra income, and 'buy-it-yourselfers,' those who lacked the expertise to do the work themselves but who bought parts and then hired others to install them.
To serve these customers, Auto Shack sought to establish quality and expert advice from employees as a hallmark of its business plan. In addition, the company tried to locate its stores in neighborhoods where people who worked on their cars lived and to keep its stores open at hours when its customers were not otherwise occupied at work. This initially meant that many Auto Shack stores stayed open all night. Auto Shack stores were clean and bright, and the company emphasized friendly, helpful service. Company chairman Hyde himself, garbed in a company uniform with a name tag, spent a quarter of his time visiting Auto Shack stores to keep an eye on operations and to encourage employees to do their best.
In its second year of operation Auto Shack added 23 more stores, branching out into five nearby states: Alabama, Kentucky, Missouri, Mississippi, and Texas. By this time the company had started to hit its stride, and on average it would go on to open a new store every week for its first ten years in business. Before opening a new outlet, Auto Shack's research analysts spent time looking at appropriate sites. The company's intended customer base was lower- or middle-income males between the ages of 18 and 49. The company's ideal customer was a male who, both as a hobby and an economic necessity, spent a lot of time working on his car to keep it running much longer than ordinarily expected. Auto Shack estimated that the ever-rising cost of a new car, both in absolute dollars and as a percentage of the average family's income, was a strong incentive for a large portion of the population to enter the market for replacement auto parts.
In addition, Auto Shack took note of the business practices of other successful retailing establishments in the South, including Wal-Mart Stores, Inc., on whose corporate board Hyde sat for seven years. By selling a high volume of goods in a large number of stores serviced by central distribution centers, Auto Shack was able to keep its costs and prices low, providing the chain with a tremendous competitive advantage over smaller operations. In addition, the bright, modern, clean store interiors were a welcome contrast to the dark, grimy aura projected by some other parts outlets and by auto junkyards.
By 1981 Auto Shack had opened 45 stores, and by the following year the number was up to 74, all within its core market area. By 1982 Auto Shack's Memphis warehouse had expanded to 96,000 square feet, growth made necessary by the increasing number of Auto Shack outlets. In 1983 Auto Shack again expanded in numbers of stores, growing to 139 outlets, and in geographical scope, adding outlets in Georgia, Arizona, Illinois, and Louisiana. By the following year the number of Auto Shacks had reached 200, and openings in Florida and South Carolina pushed the company's tally of states to 13. In addition, two more distribution centers were opened to serve the increasingly far-flung Auto Shack operations. Facilities in San Antonio, Texas, and Phoenix, Arizona, raised the company's total warehouse space to 320,000 square feet.
In 1984 the leaders of Auto Shack's corporate parent, Malone & Hyde, decided that the company's stock was undervalued. To get the most value out of their properties, Hyde and his fellow executives decided to take the properties private in a leveraged buyout. To do this, they enlisted the help of the investment banking firm Kohlberg Kravis Roberts & Company (KKR), which engineered the withdrawal of Malone & Hyde from the stock market. KKR was compensated with large blocks of Auto Shack stock, in effect becoming the owner of the company.
Aggressive Growth through the Mid-1980s
Despite its new corporate status, Auto Shack continued to grow at a dramatic rate. In 1985 the company opened an additional 68 stores and moved into North Carolina. Along with its standard format, Auto Shack also inaugurated an Express Parts Service that rushed auto parts to customers who called in over a toll-free service line. In this way the company was able to offer services to parts of the country that were not yet served by an Auto Shack store.
Auto Shack took another step toward upgrading customer service in 1986 when it instituted a lifetime warranty on 42,000 separate parts it sold. The company's decision on which products to offer was closely tied to its research into what customers wanted. For some types of goods, Auto Shack stocked a wide variety of nationally known brands. Motor oil fell into this category, as surveys indicated that Auto Shack customers had a strong preference for private-label oils, being more concerned about the perception of guaranteed quality than the lowest price.
For many other goods, however, research indicated that customers simply wanted the cheapest price possible. In general, this criteria applied to more expensive car parts, where brand names were little known. Auto Shack developed its own sources for such products, eliminating the middleman and the additional costs of a distributor. In this way the company was able to offer less expensive products to its customers. On this level Auto Shack was structured like a vertically integrated business, although it had not taken on the complications of a manufacturing operation. The company's supply lines were directed by product managers, who visited factories and worked closely with suppliers to ensure quality control on various parts. The company's high volume of sales made it possible for specialized efforts like this to be efficient. In addition, Auto Shack's advertising department participated in the effort to define and upgrade products and then attempted to win new customers for them.
By 1986, as New Mexico was added, such practices had allowed Auto Shack to expand to 339 stores in 15 states. A new warehouse was also opened in Greenville, South Carolina. The company's telemarketing operation, Express Parts Service, logged its one millionth call, and an additional service, an Electronic Catalogue, was brought on-line on October 1, 1986, at the company's Bellevue store in Memphis. This database, installed throughout the company's stores, eventually grew to contain more than four million entries on parts for more than 15,000 vehicles.
Diversification and Continued Expansion in the Late 1980s and Early 1990s
In 1987 Hyde divested himself of all parts of his family business, Malone & Hyde, except Auto Shack, the fastest growing unit. For the first time Auto Shack stood alone, apart from its corporate parent. As a symbol of its new identity and to give the company's stores a more upscale image, the name was changed to AutoZone. The company announced that the new name would apply to all 390 stores.
The process of conversion began in the following year. An outlet was opened under the new name in Enid, Oklahoma, marking the company's entry into yet another state. Overall, AutoZone had 470 stores in 16 states by the end of 1988, and it served a total of 47.7 million customers in that year alone. In June 1988 the company unveiled its own line of auto products, developed by its product managers, under the trade name ADuralast. The number of AutoZone customers for these and other products rose to more than 51 million by 1989, the year of the company's tenth anniversary, and sales topped $500 million. By this time AutoZone had become the third largest American auto parts retailer. To continue to build growth, the company advertised aggressively on television, on radio (airing ads in Spanish and Navajo, as well as in English), and in newspapers.
As a symbolic gesture in 1989, AutoZone opened its 500th outlet, a store in Hobbs, New Mexico, on July 4, the date on which it had opened its first store ten years earlier. By the end of the year 14 more stores had been added, and all of the facilities were known by the company's new name. Under this name AutoZone diversified its outlets to include regular stores and superstores. The first of the larger outlets was opened in Memphis. Whereas the usual AutoZone store filled about 5,400 square feet and cost $200,000 to construct, the larger version cost about $70,000 more and stocked 5,000 additional items. More than 50 superstores had been opened by the middle of 1989, with the largest, located in New Halls Ferry, St. Louis, Missouri, boasting a 17,368-square-foot selling floor.
By 1990 AutoZone had expanded into two additional states, opening stores in Utah and Indiana, for a total of 539 outlets. The company also broke ground for a distribution center in Lafayette, Louisiana, to serve its expanded geographical operations and introduced another line of its specially manufactured items, Deutsch filters. In addition, AutoZone opened its first 8,100-square-foot prototype store in Santa Fe, New Mexico.
In April 1991 AutoZone ended its tenure as a privately held company when shares were offered for sale on the New York Stock Exchange. The 3.2 million shares offered produced a large paper profit for the company's primary owner, Kohlberg Kravis Roberts & Company. Under the structure of the stock offering, KKR retained its ownership stake in AutoZone, as investment partnerships run by KKR retained 68 percent of the company. AutoZone managers kept 16 percent of the company, and former managers retained another six percent, leaving ten percent for the public at large. With the ten percent of stock offered, AutoZone reduced its bank and mortgage debt and also invested in general company operations.
In the five months following AutoZone's stock offering, the price of the company's shares rose dramatically, fueled by enthusiasm for the company's rapid growth and financial prospects. In September 1992 KKR announced that it would sell an additional 2.3 million shares of AutoZone to the public in an effort to increase the company's financial liquidity and reduce the swings in the price of its stock.
While AutoZone's financial fate was being determined on Wall Street, the company's operations and expansion continued apace. Its fifth distribution center, in Lafayette, Louisiana, was opened in 1991, as were an additional 53 stores, including the first outlets in Colorado. Also in 1991, AutoZone introduced an electronic Store Management System that allowed prices to be bar-coded and scanned at checkout counters, thus speeding up customer transactions. In addition, the system allowed electronic credit card and check approval. It refined inventory control and automated in-store accounting procedures.
In December 1991 AutoZone held its first shareholders' meeting, at which the company was able to announce that gross revenues had increased more than 20 percent in the previous year to reach $818 million. Net income had risen to $44 million, an increase of 89 percent.
Relying on demographics indicating that the Midwest contained a large pool of blue-collar workers who repaired their own cars both as a hobby and to save money, AutoZone began to plot its expansion into this area of the country. In 1992 the company upped its number of stores to 678 and made its first move into Wisconsin. Company sales topped $1 billion for the first time, allowing the company to continue its string of store openings without going into debt. More openings were made in another Midwest state, Michigan, in 1993. To distribute products to its new customers, the company opened distribution centers in Illinois and Tennessee.
Mid- to Late 1990s: Growth through Acquisitions and New Store Openings
As AutoZone continued its rapid and aggressive expansion, its revenues continued to rise as well. Total revenues increased from $535.8 million in 1989 to $1.216 billion in 1993, and they showed no signs of slowing down. To better serve customers, AutoZone in 1994 installed Flexogram, a satellite-based system designed to customize store inventory according to local demands and to facilitate communications between store locations. The company, which opened an average of 250 new retail stores a year, including its 1,000th store in 1995, did not slow its blistering pace in the 1990s.
Although AutoZone was quickly emerging as the industry's retail leader, the market was becoming increasingly competitive, and the company believed that restricting itself to selling only auto parts would limit its potential. It was for this reason that AutoZone began to aggressively explore new businesses and opportunities, especially through acquisitions. In 1996 AutoZone expanded its consumer target to include commercial customers, such as professional automotive technicians and service stations. The company introduced a commercial program that provided credit and delivery to mechanics and technicians. Also in 1996 AutoZone purchased ALLDATA Corp., a software company that developed automotive diagnostic and repair software.
In 1997 AutoZone opened its 1,500th store, and Hyde, who had seen AutoZone grow from a single small store in Arkansas to a national retail chain, stepped down as CEO. He was replaced by then COO Johnston Adams. Shareholder KKR sold its 13 percent share in the company in 1998, and by 1999 Hyde had divested the majority of his interest in AutoZone, although he continued to serve on the board of directors.
AutoZone made several important acquisitions in fiscal year 1998, which ended August 29, 1998. In February the company bought Auto Palace, a retailer with 112 stores in six states in the northeastern United States. The purchase allowed AutoZone to move easily into a new market, and within a year all Auto Palace shops had been converted to AutoZone stores. In May the company purchased TruckPro L.P., an independent U.S. distributor of heavy-duty truck parts that had 43 stores in 14 states. The acquisition provided AutoZone with a doorway into the truck parts business, a fragmented industry with no clear leader and thus similar to the auto parts industry when AutoZone had first begun. The company planned to strengthen TruckPro's business and make it the industry leader. At the end of June, AutoZone made a third acquisition, Chief Auto Parts Inc., with 560 outlets in five states. The acquisition significantly expanded AutoZone's presence in the critical California market by increasing the number of AutoZone stores in that state to about 400, up from one store the previous year.
Although AutoZone was busily involved with acquisitions, the company still managed to open 275 new AutoZone stores during fiscal 1998. At the commencement of fiscal 1999, in October, AutoZone made yet another acquisition by purchasing 100 Express stores from The Pep Boys--Manny, Moe & Jack. In December 1998 the company opened its first international store, in Nuevo Laredo, Mexico, across the border from Texas. By the end of fiscal 1999 the company had opened five additional stores in Mexico and had remodeled and reopened 96 of the 100 Express stores as AutoZones. In addition, the company had also completed converting Chief Auto Parts stores into AutoZones, opened 167 new AutoZone stores, and opened three new TruckPro stores.
AutoZone was in strong shape as it celebrated its 20th anniversary. Sales in fiscal 1999 reached $4.12 billion, a 27 percent increase over 1998. The company planned to continue building its heavy-duty truck parts business and its commercial account division until AutoZone was the leader of both categories. The company also intended to continue seeking out new opportunities, particularly in international markets. Research by AutoZone pointed to international demand, and the company believed that international markets could support AutoZone stores comparable in number to those in the United States. In addition, to serve smaller U.S. communities that did not warrant full-size AutoZone stores, the company created a small-store prototype and planned to bring the total number of AutoZone outlets in the nation to more than 5,000.
Principal Subsidiaries:TruckPro L.P.; ALLDATA Corp.
Principal Competitors: Genuine Parts Company; The Pep Boys--Manny, Moe & Jack; Wal-Mart Stores, Inc.; Advance Holding Company; CARQUEST Corp.
- 1979: Joseph R. Hyde III opens Auto Shack, a retail automobile parts store, in Arkansas.
- 1987: Auto Shack changes its name to AutoZone.
- 1989: On its tenth anniversary AutoZone opens its 500th store.
- 1991: AutoZone becomes a publicly traded company.
- 1995: The 1,000th AutoZone store opens.
- 1999: AutoZone expands into Mexico.
- Public Company
- Incorporated: 1979 as Auto Shack
- Sales:$4.12 billion (1999)
- Employees: 38,500
- Stock Exchanges: New York
- Ticker Symbol: AZO
- NAIC: 44131 Automotive Parts and Accessories Stores
Further ReferenceBox, Terry, 'With Texas Store Conversions Done, Auto Parts Giant Shifts Focus,' Dallas Morning News,May 18, 1999, p. D1.Halverson, Richard, 'The Preeminent Purveyor of Parts,' Discount Store News,December 14, 1998.Henry, John, 'AutoZone to Acquire TruckPro,' Arkansas Business,March 9, 1998, p. 10.Neumeier, Shelley, 'AutoZone,' Fortune,December 2, 1991.Obermark, Jerome, 'Autozone Ends '99 with Sales Up 27%,' Memphis Commercial Appeal,September 30, 1999, p. C1.Peltz, James F., 'Overhauling Auto Parts Sales,' Los Angeles Times,May 20, 1998, p. D1.Tune-In Newsletters, Memphis: AutoZone, Inc., 1989--92.
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