Aarons 2002 Annual Report Download - page 10

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generated an extremely strong response,
began with Aaron’s title sponsorship of
the NASCAR Busch Grand National
Car Race at the Atlanta Motor Speed-
way. Running under the banner of
“Aaron’s 312,” this nationally televised
event, also held at the Talladega
Superspeedway, plays off the three
reasons to shop at Aaron’s: 1) you are
pre-approved, 2) you have a low price
guarantee, and 3) you can own the mer-
chandise in as little as 12 months. The
Company also sponsors the Aaron’s 499
Winston Cup race at Talladega .
Other elements of the marketing pro-
gram include sponsorship of the Georgia
Force, and other sporting events.
Aaron’s also effectively uses direct-mail
advertising with more than 13 million
flyers mailed monthly to homes in the
market areas served by the stores.
The Aaron’s concept offers major
advantages through the vertical inte-
gration of the Company’s volume
purchasing program, key factors in
assuring timely delivery of merchandise
to customers. Unique in its industry,
Aaron’s produces much of the furniture
for its stores at its 10 MacTavish
Furniture Industries facilities, creating
cost benefits that are passed on to
customers. Aaron’s also relies on 11
distribution centers located in key
regions of the country, enabling stores
to provide same-day or next-day deliv-
ery, another competitive edge.
Aaron’s Sales & Lease Ownership offers
its “Dream Products” on the Internet at
www.shopaarons.com.
Difficult economic times often
afford the best opportunities
for strategic acquisitions at
reasonable valuations. During 2002, the
Company completed the acquisition of
Sight’n Sound Appliance Centers, Inc.,
a specialty retailer of furniture, appli-
ances and consumer electronics with 25
stores in Oklahoma and Kansas. These
stores are now operating under a new
Sight & Sound name. Sight & Sound is
offering both retail sales to customers
as well as the sales and lease ownership
transaction for those consumers who do
not qualify for credit financing. The
sales and lease ownership program was
rolled out in the fourth quarter of 2002.
Based on early returns, it appears that
this program will significantly increase
the revenues and profitability of the
chain and bring in a slightly higher
demographic customer. An experienced
executive from a national electronics
retailer has been brought in to manage
the revamped retail operation.
The Company continues to evaluate
acquisition opportunities as a vehicle to
increase its growth. In many cases,
acquisitions involve no real estate
obligations. Rather, the Company is
acquiring a book of business (outstand-
ing customer agreements) to fold into a
Company-operated store, resulting in
improved operating leverage and an
expanded customer base. The Company
continues to explore acquisitions on a
case-by-case basis.
ACQUISITION ACTIVITY