Aarons 2005 Annual Report Download - page 8

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the leased merchandise, Aaron’s prices are typically over
30% less than competitors. The customer may terminate
the lease at any point without additional obligation. A
significant number of Aaron’s customers have leased
from the Company before, an indicator of the Company’s
customer loyalty and commitment to service.
The Aaron’s stores, which average 9,000 square feet, are
open six days a week, normally closing at 7 p.m. (6 p.m.
on Saturdays) and can be operated
with less than 10 employees. A
typical store will draw from up
to a 10-mile radius in an urban
market or two to three rural
counties. The organizational
structurehas evolved and been
adapted to best manage the
Company during various phases
of growth. With stores now in 46
states, Canada and Puerto Rico,
decentralization based on regional
management has proven most
effective in managing the store
system. Supportfunctions such as
marketing and vendor selection arecentralized, but a
regional management structure allows variations in
product offerings based on local market characteristics
and improved site selection. Execution is critical to
success of the sales and lease ownership business, and
the Company pays tight attention to inventorymanage-
ment, cost controls and cash management.
The 1970s
Intel introduced the microprocessor
in 1971. Popular Mechanics featured
akit for a personal computer in
1975, and Bill Gates dropped out of
Harvard to start a software company.
The Watergate break-in led to an
1971 –Plant acquired,
Aaron Rents begins to
manufacture furniture
The growth prospects for the Aaron’s Sales & Lease
Ownership concept remain bright. The Company has
identified potential markets that would accommodate
more than a doubling in the store base from current lev-
els. The market for sales and lease ownership is estimated
at 43% of U.S. households, defined as households with
$50,000 or below in annual income, and the Company
believes it is expanding the market at the top end. In
addition, growth has been achieved through the addition
of new product categories. Repeat business from a loyal
customer base has been a key to strong and sustained
same store revenue growth.
During 2005, the Company averaged opening at least
three new stores each week and ended the year with 748
Company-operated and 392 franchised sales and lease
ownership stores in 46 states. The Company plans
15% growth in store count per annum for the next
several years.
unprecedented presidential resignation.
Aaron Rents established a furniture
manufacturing operation which has
been expanded numerous times
to keep up with corporate growth.
1974 –Ken Butler
joins the Company