We're still in the initial planning stages, but we're excited about the opportunity to have our managers, corporate leadership and staff, franchisees and vendors participate in the legislative process.
Beth Gibbs, Vice President and General Counsel, Aaron Rents

Beth Gibbs, Aaron's Vice President and General Counsel.

Aaron's (NYSE:RNT), the second largest consumer goods leasing company in the United States, will send up to 500 co-workers to Capitol Hill to lobby in support of the Consumer Rental Purchase Agreement Act during the company's 2009 National Managers Meeting in April, 2009.

Aaron's officials say that the timing of the meeting, previously scheduled to be held in Washington D.C. the same month as industry-sponsored legislative conferences, lent itself to this unique opportunity. Mike Hickey, Aaron's VP of Management Development told RTO Online, "If we could get 300 - 500 of our key people in front of elected officials, that would be a home-run."

This could rival the size of the planned Nationwide Rental Coalition (NRC) Legislative Conference planned for the same month (see story) and represent the largest group to-date ever to visit our nation's capitol on behalf of the RTO industry.

Mamie Salazar-Harper, legislative liaison for NRC, commended Aaron's for their unprecedented commitment. "We are very exited about the synergy created by the inclusion of all rent-to-own companies and vendors from across the country."

According to Beth Gibbs, Aaron's Vice President and General Counsel, the idea for the show of strength sprang out of the company's recent meeting with its franchisees.

"With our national managers' meeting scheduled for next year in Washington, D.C., some of our franchisees approached senior management with the idea to have Aaron's lobby the Hill in support of the proposed RTO legislation. We're still in the initial planning stages, but we're excited about the opportunity to have our managers, corporate leadership and staff, franchisees and vendors participate in the legislative process. It's a chance for members of Congress to hear directly from the folks who interact with their constituents on a daily basis and to educate them about the benefits of our transaction."

Aaron's anticipates more than 2,000 participants will attend its Annual Manager Meeting scheduled to be held April 13 - 15, 2009 at the Gaylord National Resort and Convention Center. RTO Online will cover the event from Washington. See 1,500 photos from the 2006, 2007, and 2008 Aaron's National Managers Meetings.

Dwight Dumler, Rent-A-Center senior vice president of government affairs said, "We appreciate the tremendous effort Aaron's is making to tell our industry's story on Capitol Hill. Getting 200 to 300 new committed rent-to-own advocates in front of their Senators and Representative's is bound to have a positive influence." Dumler was appointed to head Rent-A-Center's Government Affairs Department in July of this year (see story).

Rent-A-Center has historically supported the involvement of all groups interested in sending a consistent message to Congress regarding passage of federal legislation that protects consumers and industry. In 2005, Rent-A-Center headed up the Coalition for Fair Rental Regulations, a short-lived but very effective group of independent and public rent-to-own companies and vendors supporting balanced federal legislation (see story).

This is Aaron's first foray into legislative action. Although a member of the Association of Progressive Rental Organizations (APRO) and many state RTO trade associations, Aaron's markets its transaction as "lease-ownership" and has avoided promoting its connection to the rent-to-own industry.

Mike Hickey (podcast) says Aaron's increased involvement is being driven in part by traditional rent-to-own operators like Robert Briley (Rent City) entering the Aaron's system. Briley, who converted his Rent City rent-to-own stores to Aaron's in November, 2006 (see story), first brought the subject of a legislative conference to Aaron's executives during a recent meeting of franchisees in New Orleans.

Hickey added that Aaron's Founder and Chairman Charles Loudermilk has always been a proponent of a well-regulated rental industry. "Let Congress tell us the price," Hickey said. "If we know the rule, we can play the game. It will help us, it will help the consumer, it will help everybody, so I see no reason not to support that legislation."

Aaron's stores operate under a consumer lease or a rent-to-own contract, depending on the state. Hickey said 400 locations, one quarter of all Aarons stores, are operating under the already federally regulated consumer-lease, which obligates the buyer to 4 months and one day. The remaining stores offer rental-purchase agreements that carry no obligation past the initial contract period.

Aaron's began testing 12, 18 and 24 month consumer-lease contracts six years ago. On a 12 month lease-purchase agreement, the consumer commits for the minimum 4 months. On an 18 or 24 month lease, they commit for 5 and 6 months respectively. While calculating "keep-rate", the percentage of customers that rent merchandise and acquire ownership with no break in the term, is difficult to calculate, Hickey says "6 out of 10" (60%) of Aaron's customers acquire ownership of rented merchandise - some through early-buyout options and some by completing the lease-purchase term.

Hickey says that the company's larger showrooms and their ability to maintain a high new-vs-pre leased inventory percentage puts Aaron's in a position to capitalize on the projected increase in credit-starved consumers.

RTO Online interviewed Aaron's President Ken Butler and Chief Financial Officer Gil Danielson during the 2008 Aaron's National Managers Meeting - 557 photos.

Ken Butler - President, Aaron's Sales and Lease Ownership - Play online - iTunes
Excerpts from Ken Butler Podcast 3-26-2008:
Everybody knows the economy is tough. Being a survivor means finding a way to overcome obstacles and still win - I have 100% confidence that our team will do that. We're not going to participate in the down economy. I think the strength of our model is the culture and spirit of our people. That spirit helps me be a better leader. We're going to out-work and out-perform our competition. Our customers still need the necessities of life and we fight to keep prices down. There are some things customers are willing to pay for. Larger stores are an example. Our challenge is to cut things that customers don't want to pay for and keep those things that they do. We focus on the customer experience. From greeting to closing to delivery to ownership. We want to focus on things that keep the customer coming back for life. I'm very optimistic about the impact of the tax rebates. Anytime we can go into the second and third quarter and our customers have extra money in their pocket, it's going to be a great thing for this industry.

Gil Danielson - CFO, Aaron Rents - Play Online - iTunes
Excerpts from Gil Danielson Podcast 3-26-2008:
Excerpts: I'm in my 18th year as CFO of Aaron Rents. This is our 53rd year in business. The company went public in 1982. The last 10-15 years we've expanded dramatically. We've done four equity offerings since 1994. We've doubled our revenue, store base - just about every financial metric - in the last four years. There are very few retail companies around that have our consistency. We've grown primarily organically and that will be the strategy going forward. We have the strongest balance sheet in the industry and we have the resources to grow. I think the future is very bright. We're slowing the growth down a little bit to focus on execution and that will improve profits going forward.

More Aaron's podcasts:

PLAY : Mark Rudnick - Vice President Marketing, Aaron Rents.

PLAY : Greg Tanner - National Director of Franchising, Aaron's Sales and Lease Ownership.

PLAY : Joe Fedorchak - Vice President, Eastern Operations, Aaron's.