Aarons 2003 Annual Report Download - page 8

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other information of interest. This system will
be rolled out nationwide in 2004 and should
greatly enhance store productivity. The Company
also began to introduce bar-coding into store
inventory management, achieving significant
improvements in both efficiency and customer
service. Historically, the weekly physical inventory
tied up a substantial number of store associates
for an extended period of time. Bar-coding has
enabled one person to complete a store inventory
in less than two hours, freeing up all other store
associates to serve customers. The Company has
also rolled out GPS (global positioning system)
capability to its fleet of trucks, which will improve
fleet operating efficiency and enable stores to
more precisely schedule customer deliveries.
The Company’s marketing program is built
around the “Drive Dreams Home” sponsorship
of NASCAR championship racing, which serves
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. The program, which has
generated extremely strong response, began with
Aaron’s title sponsorship of the NASCAR Busch
Grand National Car Race at the Atlanta Motor
Speedway. Running under the banner of
“Aaron’s 312,” this nationally televised event
plays off the three reasons to shop at Aaron’s:
everyone 1) is preapproved, 2) has a low price
guarantee, and 3) can own the merchandise in
as little as 12 months. Aaron’s is now the title
sponsor of the “Aaron’s 312” Busch Series races
at Talladega Superspeedway and the Atlanta
Motor Speedway and the “Aaron’s 499” Nextel
Cup race at Talladega.
In addition, Aaron’s has renewed and extended
its national partnership with the Arena Football
League. Aaron’s Sales & Lease Ownership will
be featured in in-arena promotions including
public address and scoreboard video announce-
ments, premium give-away opportunities, and
one promotional night in each of the AFL’s 19
team markets. The AFL will be featured in over
800 Aaron’s stores with in-store marketing
materials and direct-mail circulars. This AFL
partnership includes logo identification on the
jerseys of all visiting teams. Arena football is
growing in popularity and will begin its second
season of network television coverage in 2004
with NBC telecasts. Aaron’s is proud to partner
with this exciting sport.
Other elements of the marketing program
include sponsorship of the athletic programs of
the University of Texas and Georgia Institute of
Technology (Georgia Tech). In addition, Aaron’s
effectively uses direct-mail advertising with more
than 16 million flyers mailed monthly to homes
in the markets served by Aaron’s stores.
The Aaron’s Sales & Lease Ownership concept
has been successfully executed in both large and
smaller markets. The strength of this business
model has been demonstrated by the rapid market
penetration of new stores. In 2004, the first
Aaron’s Sales & Lease Ownership stores will open
in Alaska and several more stores will open in the
Canadian province of Ontario. Extensive analysis
suggests that these two markets will be excellent
expansion opportunities. At year-end the division
had 787 Company-operated and franchise stores
across the United States and in Puerto Rico and
Canada, a growth rate of 22% in store count
over the past year.
The Aaron’s Sales & Lease Ownership concept
continues to be the key growth vehicle for the
Company. This division posted a 26% increase
in revenues in 2003, following an excellent 31%
gain in 2002. Same store revenues increased
10.1% in 2003, following a 13% increase in
2002, clearly one of the stronger performances
in the retailing industry.
During 2003, the Aaron’s Sales & Lease
Ownership division added a net of 143 stores,
including 59 Company-operated stores added
through acquisition (26 of which were acquired
from franchisees). At year-end, Aaron’s operated
500 Company-operated sales and lease ownership
stores. A large number of Aaron’s Sales & Lease
Ownership stores opened over the past five
years and are now in the maturation phase,
experiencing margin expansion and solidifying
market share. We continue to believe that the
Aaron’s Sales & Lease Ownership division
will post profit margin expansion over the
next several years.