Milwaukee Courier Interview
John D. Smith
Aaron’s, Inc. is a leader in the rent-to-own industry. Headquartered in Atlanta, Aaron’s, Inc. (NYSE: AAN), is a leading omnichannel provider of lease-purchase solutions. The Aaron’s Business engages in the sales and lease ownership and specialty retailing of furniture, consumer electronics, home appliances and accessories through its 1,726 Company-operated and franchised stores in 47 states and Canada, as well as its e-commerce platform, Aarons.com. Aaron’s is exploring opening stores in Wisconsin and recently entered into a groundbreaking Memorandum of Understanding with a number of civic and business groups like the Milwaukee Urban League and the Wisconsin Black Chamber of Commerce.
John D. Smith serves as Aaron’s Chief Operations Officer. He is a native of Philadelphia and a graduate of Temple University and Harvard Business School. Mr. Smith is the highest ranking African- American in the rent-toown industry.
Q: What are your current responsibilities at Aaron’s?
A: I have oversight of the Aaron’s Business’ five U.S. divisional teams, Store Support, Store Development which includes site selection and planning to construction and facilities management and our customer contact centers. I’m providing our stores and online business with the resources they need to provide our customers with the best rent-to-own experience. What we offer is a way for cash-constrained customers to have access to and own quality merchandise for their homes. The lease-to-own option is the most affordable and flexible transaction available for those without credit. Currently we get our customers to ownership of their merchandise at a higher rate than any other competitor in the industry.
Q: Many people believe that rent-to-own companies take advantage of consumers. What is your perspective on the industry and the benefits offered by companies like yours to consumers?
A: My mother – a single mom and a rent-to-own customer raised us in a Philadelphia housing project and struggled to make ends meet. Nearly half of the U.S. population suffers with no credit or little credit. The rent-to-own industry provides a valuable service by providing access to quality and needed merchandise for their homes, like refrigerators, washer and dryers and beds. It’s important to our long-term success that we treat our customers with respect and fairness and because we operate on a thin 5 percent profit margin. Therefore, ensuring a positive customer experience is the responsibility of every associate to treat customers fairly to promote customer satisfaction and customer loyalty that leads to repeat business and referrals. There are several benefits of the lease-to-own transaction. Our leases include delivery, set up and service throughout the life of the customer’s agreement as well as the following customer benefits: the ability to return at any time without default; lifetime reinstatement – meaning if life happens and can no longer keep up with your payments just return the merchandise and when you get back on your feet contact us and we will reinstate the agreement where you left off without losing your previous payments; our “No Credit Needed” policy; and clear disclosure with no hidden fees.
Q: Aaron’s does not currently operate in the state of Wisconsin. Why has Aaron’s not opened any locations here?
A: The rent-to-own industry is governed at the state level and rent-to-own transactions, while approved in 48 other states, is not yet approved for business in Wisconsin. Therefore, it’s difficult to build a business and make significant capital investments to build stores and hire people when you don’t have any safety under the law to operate the business you in.
Q: Given that major rent-to-own retailers like Aaron’s are not operating in the state, what options currently exist for Wisconsin consumers interested in rent-to-own arrangements?
A: It means Wisconsin consumers who do not have access to credit have limited options in Wisconsin if they desire to obtain household goods such as furniture, appliances or electronics. Their options may be limited to high interest payday or title loans or other high interest loans which may trap a consumer in a difficult longterm obligation. If that’s not an option, then it’s going though pawnbrokers or other second hand means.
Q: There is legislation pending with the Wisconsin Legislature relating to the rent-to-own industry. Would you give your thoughts on what the legislation seeks to accomplish and how enactment of the legislation might affect the current rent-to-own landscape?
A: The legislation seeks to provide a regulatory and legal framework with strong consumer protections – such as lifetime reinstatement and six months same as cash – that allows for the no obligation rentto- own transaction to exist in Wisconsin. Once the bill becomes law, Aaron’s would have the certainty necessary to open stores in Wisconsin. Currently, Aaron’s operates in 48 states where the rent-toown transaction is recognized under state law. Q: What role would you have in overseeing stores in Wisconsin if Aaron’s decides to open locations here? A: I will lead our field and home office teams to build stores, hire associates and operate Aaron’s stores to serve our customers with respect and fairness as we strive to do in all our 1,726 Company-operated and franchised stores in 47 states and Canada every day.
Q: It is my understanding that Aaron’s has already begun supporting community organizations here in Wisconsin despite not having a business presence here. Why has the Company decided to do that?
A. Aaron’s has a long legacy of giving back to the communities it serves through its local and national non-profit partnerships. Through the company’s guiding principle, “Caring Starts with Respect,” the Aaron’s Foundation is committed to improving the life prospects of at-risk youth and building strong communities by investing in their future. In 2017, Aaron’s gave $2.7 million to national and local partnership across the U.S. Last year, Aaron’s made a significant contribution toward the complete renovation of the Don and Sallie Davis Boys and Girls Club in Milwaukee. The donation to the Boys & Girls Club of Greater Milwaukee is part of a threeyear, $5 million national partnership with Boys & Girls Clubs of America’s Keystone Program, helping teens develop their character and leadership skills in hopes of helping them reach their potential and creating positive change in the community. Keystone Club teen centers provide members ages 14-18 an environment to plan and participate in activities that focus on community service, academic success, career preparation and teen outreach.
Q: Aaron’s recently entered into a Memorandum of Understanding (MOU) with a number of minority- focused civic and business organizations and tapped former Mayor Marvin Pratt to Chair its Wisconsin Diversity Advisory Board. Why has the Company decided to make this kind of substantial commitment in the state of Wisconsin?
A: Aaron’s is committed to diversity and inclusion. Over a third of our store leaders are minorities. We’re excited about the prospects of investing with each of these organizations and communities throughout Wisconsin – and I’ve already mentioned that Aaron’s has invested in Wisconsin via the Boys & Girls Clubs of America. The MOU represents a model that can be replicated here in Wisconsin with other retailers seeking or currently doing business in the minority community.