PHOENIX—Two well-known automotive parts providers have set their sights on having a large—very large—"e-commerce" presence on the Internet. CSK Auto Inc. and Advance Auto Parts, along with Sequoia Capital, a Silicon Valley venture capital firm, have formed a partnership that plans to launch a new Web site company, PartsAmerica.com, to serve both consumer and commercial customers. Their aim: to become the Internet's largest electronic commerce destination for automotive parts and accessories, a market estimated at about $90 billion.
CSK, based in Phoenix, is a retailer of automotive parts and accessories through more than 1,100 stores located primarily in the western U.S. The outlets operate under the trade names Checker Auto Parts, Schuck's Auto Supply and Kragen Auto Parts.
Advance Auto, in Roanoke, Va., has more than 1,600 retail stores that sell automotive parts and accessories in 37 states primarily in the eastern and midwestern U.S. plus Puerto Rico and the Virgin Islands.
Unlike "virtual Web sites" that rely on a patchwork of automotive part wholesalers, PartsAmerica.com will leverage the existing infrastructure of more than 2,700 CSK Auto and Advance Auto stores in 50 states, as well as their 3,000 delivery vehicles and 59 distribution facilities, according to a press release issued by the companies.
The combined annual marketing budgets of CSK and Advance total more than $100 million, and the firms claim that more than 4 million customers visit their stores weekly.
Through the PartsAmerica site, consumers and repair shops will be able to purchase a wide selection of automotive parts and select delivery options including same-day delivery, local in-store pickup and overnight shipment. Because of the companies' 50-state coverage, customers will be able to return or exchange merchandise at a local CSK or Advance parts store.
Prior to the Web site's launch, customers will be able to order parts and accessories through CSK's existing e-commerce site, cskauto.com, which will be incorporated into PartsAmerica.com.
CSK and Advance will own equal stakes in the venture. Sequoia Capital will be the lead investor with additional funding from CSK, Sears, Roebuck and Co., Ripplewood Holdings L.L.C., and Freeman Spogli & Co., a private investment firm based in Los Angeles and New York which is a primary shareholder in Advance Auto Parts' parent, Advance Holding Corp.
Maynard Jenkins, CSK's chief executive, said the 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."
PartsAmerica.com will be able to serve customers anywhere in the U.S. on a same-day basis, he said, "and allow them to interact with our combined store base, giving it a significant advantage over Internet-only businesses."
With the Internet continuing to grow as a distribution channel for traditional retailers, Advance Auto CEO Garnett Smith said 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 the firm's investment in the venture represents its first partnership with bricks and mortar retailers in the U.S., and it is "confident that PartsAmerica.com's business model is far superior to any option that exists for the consumer today."
The Web site will offer customers prompt delivery and competitive pricing, the companies said, based on the availability of Advance Auto's and CSK's more than $1 billion in inventory "and their unparalleled buying power."