Based on its solid store expansion plans, leading rent-to-own operator, Aaron's Inc. (AAN), reported that it has generated nearly 950 new jobs across the United States and Canada in 2012. At its 2013 National Managers Meeting held in Nashville, last week, the company proposed a similar growth strategy for 2013.
Looking into 2013, the company expects its employee base to expand in sync with its aggressive store expansion plan announced earlier. The company targets to employ about 750 new people in 2013 to fill in vacancies at its targeted 125 new stores to be opened across the United States and Canada this year.
In 2013, management aims at 4%–6% rise in new store openings over 2012, with equal number of company-operated and franchised stores and a small rise in the number of HomeSmart stores. Going forward, the company will remain focused on its strategy of acquiring franchised stores or selling underperforming company-operated stores.
Aaron’s has been progressing well on its store expansion strategy as evident from its mid-March announcement of opening 32 new company-operated and franchised stores in 17 different states of the U.S. and 2 Canadian provinces over a span of 3 months.
Earlier, in Sep 2012, Aaron’s opened its 2,000th store in Bronx, N.Y., marking a strong fiscal 2012 for the company. During fiscal 2012, it expanded its store count by 6.6%.
Aaron’s is a rent-to-own operator in the United States, and has a low price provider strategy. The company is involved in rental and specialty retailing of consumer electronics, residential and office furniture, household appliances, and accessories. Currently, Aaron's has a customer base of over 1.7 million throughout the U.S. and Canada.
Moreover, Aaron’s leverages an extensive network of stores to effectively penetrate into its target markets, which in turn facilitates the company to generate healthy sales and gain a competitive advantage over its rivals. The company currently operates over 2,075 company-operated and franchised stores across Canada and 48 states of the U.S.
The company’s peer, Rent-A-Center Inc. (RCII) also follows a similar strategy of expanding its store network to boost its top line. For 2013, Rent-A-Center’s management plans to open approximately 60 rent-to-own locations in Mexico. Furthermore, the company aims at about 425 domestic RAC Acceptance kiosk additions.
Despite these encouraging expansion prospects, currently, shares of Aaron’s hold a Zacks Rank #3 (Hold).
However, until any further upward revision in Aaron’s rank, other stocks in the finance-leasing universe worth considering are AeroCentury Corp. (ACY) and CorEnergy Infrastructure Trust (CORR), which hold a Zacks Rank #1 (Strong Buy) and a Zacks Rank #2 (Buy), respectively.
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