Aarons 2001 Annual Report Download - page 8

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Aaron’s Sales & Lease Ownership has created a
winning concept that drives the record-breaking growth of
this division. Aaron’s simply makes shopping and ownership
of merchandise fast, easy and convenient with a low-price guarantee and top brand-named products.
There’s nothing like it in the marketplace today.
It is a new kind of specialty retailing with lease options, bridging the gap between the older form of rent-to-
own and the traditional approach to credit retailing by the home furnishings industry. Aaron’s is reaching the
broader market composed of lease ownership, credit retail and rental customers.
Aaron’s successfully targets the higher end of this market, which is demonstrated by the fact that approxi-
mately 40 percent of our customers pay by either check or credit card, unlike typical rent-to-own customers.
Aaron’s also has set a standard of monthly payments for lease ownership, a substantial difference versus the
weekly payment system of the rent-to-own industry. As a result, Aaron’s gains higher end accounts and at the
same time reduces the expenses of processing them.
The new concept developed by Aaron’s is now filling a huge void created by the demise of several major
credit furniture retailers, which in the past two years closed approximately 2,000 stores with an estimated
$3.5 billion in annual sales volume. That is the market served by Aaron’s, and to seize such an unprecedented
opportunity, the Company acquired more than 80 store locations from one of the industry’s formerly largest credit
retailers. Most of these locations have been converted into Aaron’s stores and have come on line within the past
year, dramatically expanding our ability to increase market share quickly and add to the Company’s profitability.
Aaron’s customers start with automatic approval, as no credit is needed since the transaction is on a lease-to-
own plan. Yet it requires no long-term obligation, allowing the customer to return the merchandise at any time.
Delivery is the same day of the order or the next day. There is no delivery charge, no application fee and no
balloon payment. Terms are fully disclosed: cash and carry price, monthly payment and total cost under the
lease ownership plan. The payment options include cash, check or credit card.
Aaron’s stores are larger with more appealing designs, usually located in suburban areas with generally higher
income level customers than the traditional rent-to-own business attracts. The size of Aaron’s stores, averaging
9,000 square feet, is three times that of a typical competitor’s store. This provides our customers a far wider
selection of top brand named products as well as the stylish proprietary furniture lines manufactured by
MacTavish Furniture Industries.
The result is strong acceptance by customers each time a new store opens, regardless of whether it is located
in a large city or a smaller one. Demonstrating the immediate popularity of Aaron’s in new markets and the
dominance of its concept is the 21% increase in revenues for the Aaron’s Sales & Lease Ownership division in
2001, an exceptional performance in the retailing industry. Same-store revenues increased 7.7% for the year in
the division.
AARON’S SALES & LEASE OWNERSHIP:
A WINNING CONCEPT
WINNING