Profile: Aaron's Inc (AAN)
28 Sep 2016
Aaron's, Inc. (Aaron's), incorporated on March 28, 1962, is a specialty retailer of furniture, consumer electronics, computers, appliances and household accessories. The Company's operating segments include Sales and Lease Ownership, Progressive, HomeSmart, DAMI, Franchise, Manufacturing and Others. The Company's store-based operations engage in the lease ownership and retail sale of a range of products, such televisions, computers, tablets, mobile phones, living room, dining room and bedroom furniture, mattresses, washers, dryers and refrigerators. Its stores carry brands, such as Samsung, Frigidaire, Hewlett-Packard, LG, Whirlpool, Simmons, Philips, JVC, Sharp and Magnavox. The Company has approximately 2,040 stores, which consist of over 1,300 Company-operated stores in approximately 30 states, the District of Columbia and Canada, and over 730 independently owned franchised stores in approximately 47 states and Canada.
Sales & Lease Ownership
The Company's Aaron's Sales & Lease Ownership segment employs a monthly payment model to provide household goods to lower to middle income consumers. Its customer base consists of consumers with limited access to traditional credit sources, such as bank financing, installment credit or credit cards. The Aaron's Sales & Lease Ownership store layout is a combination showroom and warehouse comprising 6,000 to 8,000 square feet, with an average of approximately 7,200 square feet. In addition to inline space, it also leases and owns various free markets. Its stores provide a selection of brand name electronics, computers, appliances and furniture, including furniture manufactured by its Woodhaven Furniture Industries division. The Company has approximately 1,220 Company-operated Aaron's Sales & Lease Ownership stores in over 30 states, the District of Columbia and Canada.
The Company's Progressive segment is a virtual lease-to-own company. Progressive partners with retailers, primarily in the furniture, mattress, mobile phone, consumer electronics, appliance and household accessory industries to offer a lease-purchase option for customers to acquire goods. It offers a technology-based application and approval process. Once a customer is approved, Progressive purchases the merchandise from the retailer and enters into a lease-to-own agreement with the customer. The contract provides early-buyout options or ownership after a contractual number of renewals. Progressive has retail partners in over 40 states and operates under state-specific regulations in those states.
The Company's HomeSmart segment serves customers preferring weekly payments and renewals. The consumer goods that it provides in its HomeSmart segment are similar to those available in its Aaron's Sales & Lease Ownership stores. The HomeSmart store layout is a combination showroom and warehouse of 4,000 to 6,000 square feet, with an average of approximately 5,000 square feet. The Company has over 80 Company-operated HomeSmart stores in over 10 states.
DAMI serves customers that may not qualify for traditional prime lending and desire to purchase goods and services from participating merchants. DAMI, which operates as a subsidiary of Progressive, offers customized programs, with services that include revolving loans, private label cards and access to a processing platform. DAMI's network of merchants includes medical markets, beds and fitness equipment.
The Company franchises its Aaron's Sales & Lease Ownership and HomeSmart stores in markets. The Company provides support in designing the floor plan, including the proper layout of the showroom and warehouse. In addition, it assists the franchisee in the design and decor of the showroom. It also leases the exterior signage to the franchisee and provides support with respect to pre-opening advertising, initial inventory and delivery vehicles. All franchisees are required to complete a training program to operate their franchised sales and lease ownership stores in compliance with its policies, standards and specifications. Additionally, each franchise is required to represent and warrant its compliance with all applicable federal, state or local laws, regulations and ordinances with respect to its business operations.
The Company's manufacturing segment includes Woodhaven Furniture Industries. The Company's produced items are leased or sold through Company-operated or franchised stores. Its Woodhaven Furniture Industries segment produces upholstered living-room furniture (including contemporary sofas, chairs and modular sofa and ottoman collections in a range of natural and synthetic fabrics) and bedding (including standard sizes of mattresses and box springs). The segment provides replacement covers for all styles and fabrics of its upholstered furniture, as well as other parts, for use in reconditioning leased furniture that has been returned. The segment consists of approximately five furniture-manufacturing plants and nine bedding manufacturing facilities aggregating approximately 818,000 square feet of manufacturing capacity.
The Company competes with Rent-A-Center, Inc.
400 Galleria Pkwy SE Ste 300
ATLANTA GA 30339-3182