Aarons 2011 Annual Report Download - page 7

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this has been the story of Aaron’s in times of good
employment and easy credit and in times of high
unemployment and tight credit.
Aaron’s unique sales and lease ownership business
model competes with home furnishings retailers
serving the middle- and lower-income market,
including rent-to-own stores and traditional credit retailers.
Over the past 30 years, there has been a significant change in
the home furnishings industry. In the 1970s and 1980s, and
into the 1990s, home furnishings retailing was dominated by
chains offering in-house financing as well as a fragmented rent-
to-own market. Well-known brands were among the leaders
in the industry and individual stores struggled to compete
against the chains. Aaron’s was a small regional chain. When the
Company completed an initial public offering in 1982, annual
revenues were only $48 million. Since then, many of those
national and regional chains are out of business and Aaron’s
is thriving. Today, Aaron’s is one of the nation’s largest home
furnishings retailers. The Aaron’s story has many more chapters
to come.
Aaron’s® brings the best business model to the consumer.
Aaron’s has a distinctive business model which is flexible and
can accommodate a wide range of consumer profiles. For the
credit-constrained consumer, Aaron’s has a no credit check
policy, varying lease terms and the ability to terminate a
lease with no additional obligation. With a traditional credit
card purchase, there is uncertainty on the ultimate cost of
the product as interest on unpaid balances accrues monthly.
With Aaron’s, the total price of ownership of a product can be
determined on day one. Aaron’s is available when the big box
and smaller traditional retailers are reluctant to extend credit
and the Aaron’s model is better than layaway. No matter how
you look at the issue, Aaron’s offers a better path to product
ownership for the average consumer.
Our best customer is an existing customer and the high level
of repeat business is a testimony to the appeal of our business
model. Our average customer has a current monthly payment
of approximately $130, which is lower than in previous years.
The average lease term has lengthened over the past few
years, resulting in reduced monthly payments for our typical
customer. The ability to adjust lease terms allows Aaron’s
to make products more affordable in difficult economic
continued on page 9 5