Aarons 2002 Annual Report Download - page 9

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7
program is a tool for standardizing
operational procedures throughout the
system. The 13-course curriculum for
Company and franchise managers is a
key element for ensuring the uniformity
of execution and the development of
strong operating talent.
The Aaron’s Sales & Lease Ownership
concept is a powerful growth vehicle in
difficult economic conditions. This divi-
sion posted a 31% increase in revenues
in 2002, following an excellent 21% gain
in 2001. Same store revenues increased
13% in 2002, following an 8% increase
in 2001, clearly one of the stronger per-
formances in the retailing industry.
During 2001, Aaron’s Sales & Lease
Ownership added a total of 101
Company-operated stores and an addi-
tional 23 Company-operated stores in
2002. This aggressive expansion penal-
izes earnings in the early years as a new
store does not typically reach breakeven
until its second full year of operation
and will not fully mature until after
four or five years of operation.
Approximately 30% of the Aaron’s Sales
& Lease Ownership store base is now
less than two years in operation. As such,
the Aaron’s Sales & Lease Ownership
division is positioned for profit margin
expansion over the next several years.
Aaron’s expects to add approximately
30 Company-operated and 50 fran-
chised Aaron’s Sales & Lease
Ownership stores in 2003, contributing
to an estimated $1 billion+ in system-
wide revenues for the year.
At year-end the division had 644
Company and franchise stores across
the United States and in Puerto Rico, an
increase of 12% in store count for the
year. This came on the heels of a 26%
increase in 2001 and 24% in 2000 as
Aaron’s sharply accelerated its expan-
sion via the acquisition of a large number
of store real estate leases. Many of these
locations are in markets where the Com-
pany either enjoys a strong presence or
has targeted the area for expansion, thus
generating immediate benefits from the
favorable demographics of these markets.
The marketing program is built around
the “Drive Dreams Home” sponsorship
of NASCAR championship racing
serving the prime demographic for
Aaron’s products. The Company’s
theme is carried out through the
sponsorship of the #99 NASCAR
Busch Grand National Dream Machine
driven by Michael Waltrip and Kerry
Earnhardt. The program, which has