Richard L. Sharp
Co-founder 1993Background
Richard L. Sharp was the CEO of Circuit City Stores, Inc. when he conceived CarMax as 'Project X' in 1991. Sharp recognized that the used car industry was fragmented, opaque, and hostile to consumers, and believed that Circuit City's big-box retail expertise could be applied to transform the experience. He appointed Austin Ligon to lead the project and provided the corporate resources and balance sheet support to launch the first CarMax superstore in Richmond, Virginia in 1993. Sharp's vision was to create a nationwide chain of used car superstores with standardized pricing, rigorous inspections, and customer-friendly service. He oversaw CarMax's IPO in 1997 and the 2002 spin-off from Circuit City before retiring from active management.
Role at CarMax, Inc.
CarMax was not founded by a disruptive Silicon Valley entrepreneur nor was it founded by a traditional automotive dealer. In an unusual corporate origin story CarMax was conceived in 1993 as an internal skunkworks project inside Circuit City, a consumer electronics retailer. In the early 1990s, Circuit City's CEO, Richard Sharp, recognized that the consumer electronics market was rapidly commoditizing and margins were compressing. He mandated his executive team to evaluate entirely new retail sectors where Circuit City's core competencies (inventory management, advanced point-of-sale computer systems, and exceptional customer service) could be applied. Austin Ligon, a brilliant strategic planner at Circuit City, led a team to evaluate dozens of industries. They zeroed in on the fragmented $300 billion used car market, recognizing it as one of the most universally despised consumer experiences in the American economy. Ligon and his team essentially designed CarMax as the 'Circuit City of used cars.' They applied 'big box' retail principles to automotive sales: selection (often 500+ cars on a single lot), price transparency (no haggling), guaranteed quality (rigorous 125-point inspections), and a focus on volume rather than per-unit margin. The first CarMax location opened in Richmond, Virginia, in September 1993. The concept was an immediate sensation, resonating with consumers exhausted by the sleazy tactics of traditional dealerships. As CarMax exploded in growth, it eventually became more valuable than its parent company. In 2002, recognizing the divergence in their financial trajectories CarMax was officially spun off from Circuit City as an independent, publicly traded company (while Circuit City eventually collapsed into bankruptcy in 2008, proving Ligon's foundational thesis correct).