Arkansas Retailers See More Revenue in 2012

2012 was a good year for retailers on this year’s list of Arkansas’ largest private companies.

Of the 18 retailers among the 75 largest private companies, 16 showed revenue increases over 2011 figures, one remained flat and only Russell Chevrolet of Sherwood, whose revenue was estimated, dipped slightly.

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“Retail sales should continue to strengthen as the labor market improves, which means that we should expect modest gains … throughout 2013,” said Kathy Deck, director of the Center for Business & Economic Research at the University of Arkansas’ Walton Business College, said in an email to Arkansas Business.

She said the key to the boost in revenue is more people have jobs, the stock market has climbed and so have home prices.

But there have been some changes on this year’s list. The second-largest retailer on last year’s list was Stephen LaFrance Pharmacy Inc. of Little Rock with revenue of $825 million and 3,400 employees in 2011. The pharmacy chain owned by Stephen LaFrance Sr., was mainly branded as USA Drug. It was sold in 2012 to the drugstore chain Walgreen Co. of Deerfield, Ill., for $438 million.

Car Sales Increase

The largest privately owned retailer headquartered in Arkansas is RLJ McLarty Landers Automotive Holdings LLC of Little Rock. It reported revenue of $1.15 billion in 2012, up 11.6 percent over 2011.

One of the biggest increases in sales was Landers Auto Sales of Little Rock, which went from $241.7 million in revenue in 2011 to $393 million a year later. The 62.6 percent increase bumped the company, which sells new and used vehicles, from 10th place among retailers on the list last year to No. 5 this year. And among the 75 largest private companies, Landers moved from No. 36 to No. 25.

Auto dealers are seeing an uptick in revenue because consumers didn’t run out and buy vehicles during the Great Recession, said Lamar Murphy, executive director of the Arkansas Independent Automobile Dealers Association of Magnolia, which mainly represents used car dealers.

“People kind of stopped buying,” he said. “And eventually if you’re going to drive a car, you’re going to have to buy one. … As vehicles age, they have to be replaced.”

And people are replacing their cars now. He said auto sales have been strong again in the first quarter of this year.

Dennis Jungmeyer, president of the Arkansas Automobile Dealers Association, said another reason that auto sales are up is that credit for autos is easier to obtain thanks to a 2010 amendment to the Arkansas Constitution. That amendment created 17 percent as the state’s cap for loan interest rates, rather than the previous cap of 5.5 percent.

“So now people that may have marginal credit ratings can get a loan,” Jungmeyer said. “Financing is more available than it’s ever been in our history.”

He also said he thinks that the trend for auto sales will continue.

Another big mover on the list was the Crain Management Group of Sherwood. Its revenue in 2012 was $418.7 million, a 21.1 percent increase over the previous year. That performance is on the heels of a 17.2 percent gain in 2011.

Its revenue gain in 2012 moved the company from No. 6 on the list of private retailers to No. 4 this year.

While the Crain Management Group includes revenue from the Crain Media Group, which has seven radio stations in central Arkansas, the majority of Crain’s revenue came from selling vehicles under the Crain Automotive Team, said Chris Byrd, the platform manager and chief financial officer for Crain.

2013 also is expected to be a good year for Crain Management. It added two dealerships on the last day of the year in 2012 in northwest Arkansas. Crain Automotive, which operates eight auto dealerships in central Arkansas, bought Kent Dobbs Hyundai in Springdale and Hyundai of Bentonville. The dealerships are now operated as Crain Hyundai of Springdale and Crain Hyundai of Bentonville. A purchase price was not disclosed.

Crain also is building a Crain Kia in Conway, but it might not open until the end of the year, Byrd said.

“We’re still trying to grow and grow what we’ve got and acquire when we can,” he said.

One auto dealership that didn’t see a boost in revenue in 2012 was Russell Chevrolet. Its most recent estimate by Cengage Learning was $103.5 million, down 2.5 percent from the previous year. Russell did not respond to Arkansas Business’ survey.

Chevrolet loyalists are waiting for new models to arrive before they buy a vehicle, said Brett Russell, general manager of the company.

“A lot of our product line is a little bit aged,” he said. But Chevrolet has “several new models coming out” that should help sales.

Other Firms

Private retail companies not tied to auto dealerships also saw their revenue rise in 2012.

Tobacco Superstores of Forrest City reported its revenue grew 24.5 percent to $137 million in 2012. The increased revenue helped Tobacco Superstores, which operates 85 discount tobacco outlets, move from 15th to 13th among private retailers in the state.

Among all private companies, the tobacco discounter moved from No. 63 to No. 55.