Aaron’s
Ron Allen, 72, became CEO in February 2012 and he retired Aug. 31.
Allen, a longtime member of the company’s board, worked for years at Delta Air Lines, rising to become the carrier’s chairman and CEO. His tenure at Delta drew mixed reviews. The airline doubled in size and became an international player, but later struggled financially. He was eventually forced out by the company’s board of directors.
Challenges
Aaron’s was a new start for Allen. He was thrust into the top job after former CEO Robert “Robin” Loudermilk — son of company founder Charlie Loudermilk — unexpectedly stepped down after three years on the job.
Allen inherited a company that had generally weathered the ups and downs of the economy much better than other Atlanta corporations. But as the economy improved in recent years, there was concern that some customers who were drawn to the rent-to-own chain during the recession would not return.
What he did
The company struggled under Allen’s leadership, with slipping foot traffic and tumbling quarterly profit.
Some franchisees pointed the finger at him, alleging sales were hurt by changes he made in merchandise and an attempt to broaden the company’s target audience to middle-class and high-end customers. Florida-based private equity firm Vintage Capital Management, the retailer’s second largest shareholder, attempted a $2.3 billion unsolicited takeover, which failed.
Allen pushed back, saying he inherited a company with a number of problems, including a multimillion-dollar sexual harassment lawsuit, allegations the company spied on customers through rented computers, and a California attorney general’s office investigation into its business practices.
Allen demonstrated he could be a shrewd businessman. Aaron’s in April purchased Utah-based online lender Progressive Finance for $700 million, essentially quashing Vintage Capital’s takeover bid.
How he led
Much like his time at Delta, Allen seems to have left Aaron’s with supporters and detractors.
Critics accused him of pushing out longtime Aaron’s leaders who helped Charlie Loudermilk guide the company to profitability, such as former Chief Operating Officer Ken Butler. Others complained that a plan to roll out remodeled stores this year was ill-timed, given the company’s financial challenges.
Supporters, meanwhile, said Allen did listen and credited his willingness to pull back on initiatives that they objected to as insight into his character.
Allen seemed to acknowledge that some of this changes were unpopular, but necessary. He told franchisees and Aaron’s staff in a meeting last March that he made swift changes because Aaron’s was in danger of resting on its laurels.
“History shows that the path to failure is lined with companies that achieved great success, but became complacent and failed to recognize the need to take an honest look at their business practices in a changing world,” he said.
New leader
Longtime Aaron’s chief financial officer Gil Danielson, 68, has stepped in as interim CEO. Danielson, who also was the company’s executive vice president, is a 20-year officer and director at Aaron’s. He was Aaron’s vice president of finance from 1990 to 1998.
His first job is to get foot traffic back into stores and improve profitability. He also needs to make the website more interactive and develop a marketing strategy that puts Aaron’s back on top.
The board is searching for a permanent CEO from internal and external candidates.
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