Aaron's, the rent-to-own furniture company, has acquired all the stores of a competitor in five states and will be converting them to its weekly rent-to-own brand.
Crusader Rent to Own operates 30 stores in Virginia, the Carolinas, Tennessee and Georgia. One store will be merged with an existing Aaron's store while the remaining 29 will be converted to the Homesmart brand.
In March, Aaron's chief operating officer Ken Butler said he expected to have 20 Homesmart locations by the end of the year. The Homesmart brand, which is currently being tested by the company, operates on a weekly model whereas Aaron's rents items on a monthly basis.
The acquisition is a low-cost way for the company to expand the weekly model, Cowen Group senior retail analyst Laura Champine said. She said if the test doesn't work, it will be easy for the company to convert those stores back to the monthly model.
"It's just another vehicle for growth," Champine said. "It may be an acknowledgement that they're nearing maturity with their monthly chain."
Aaron's still has other opportunities for growth, including possible expansion in other countries, she said.
Champine said because the customer base is the same, the weekly market is an easy one for Aaron's to access. She said there could be as many as 50 Homesmart stores by year's end.
The terms of the deal were not disclosed. Aaron's has more than 1,800 of its flagship monthly stores.
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