Friday, February 25, 2022

[UPDATE] Aaron's to Acquire BrandsMart USA

Atlanta-based Aaron's Co. (NYSE: AAN) announced Thursday is plans to acquire Fort Lauderdale, Florida-based appliance and consumer electronic big-box retailer BrandsMart USA for $230 million in cash.  Aaron’s, a lease-to-own retailer for furniture, home appliances and consumer electronics, said it plans to close on the acquisition in the second quarter of 2022.  

Founded in 1977 by current CEO Robert Perlman, BrandsMart USA operates a total of ten stores including seven traditional and one "outlet center" in South Florida as well stores in Doraville and Stockbridge, Georgia.  The company's newest outpost, a 90,000 square foot store in Dania Pointe, opened in late 2018.  

The acquisition is expected to provide meaningful value-creation opportunities, which include leveraging Aaron's lease-to-own expertise to provide BrandsMart customers enhanced payment options and offering a wide selection of BrandsMart's product assortment to millions of Aaron's customers,” Aaron’s CEO Douglas Lindsay said. 

Established in Atlanta in 1955, Aaron's currently has approximately 1,300 company-operated and franchised stores in 47 states and Canada.  The company currently operates 77 stores in Georgia and 83 stores in Florida, according to its website.  Both companies also operate e-commerce divisions.  

We believe the acquisition of BrandsMart will expand our addressable market and create an additional platform for accelerated growth,” Lindsay added.    A total of four banks including Truist Bank, Bank of America, JPMorgan Chase Bank and Citizens Bank are providing a $200 million loan to Aaron’s to finance the deal.

For the 12 months ended December 25, BrandsMart generated $757 million in revenue and adjusted earnings of $46 million, according to the announcement.  For perspective, the company reportedly had $850 million in revenue in 2005 (with seven stores) with Perlman telling technology publication TWICE earlier that year that his company accounted for 2.5 percent of all big screen TV sales in the country.  

BrandsMart first entered the Atlanta market in 2004 with their Doraville store which was later followed by additional outposts in Kennesaw (2005),  Stockbridge (2006) and Buford (2009).  The company closed both their Kennesaw and Buford stores in 2014 with the former Kennesaw store sold to Kennesaw State University and the former Buford store reopening as Floor & Decor.  San Jose, California-based Fry's Electronics, once a rival of BrandsMart, closed all of their stores in early 2021 including one remaining Atlanta area store in Milton.  

Following the sale, BrandsMart USA will continue to be based in Fort Lauderdale and report to Aaron’s President Steve Olsen. 

Have you purchased things from BrandsMart USA?  Do think this acquisition makes sense? Where did you purchase your last appliance?

Please share your thoughts below  


Adam Freedman, Dunwoody PC, LLC said...

Sounds like they got a steal for the $230 million acquisition, but Brandsmart talked them into buying $45 million in overpriced cables or they wouldn't do the deal. Hopefully the deal closes on time and that Aaron's doesn't wait all day and no one shows up.

Anonymous said...

Brandsmart’s substandard inventory and cheap pricing loss leaders to bring in customers, and Aaron’s predatory lending practices go hand in hand. Sell crap with non-competitive prices to people who can’t afford it then offer horrific finance terms, and repossess after one missed payment. Only to resell the items as “clearance.” A perfect match!

Alex said...

Yeah, being forced to pay your bills on time and selling items for a profit is so raysisssss

Anonymous said...

Alex…do we need to call 911 for you? Just type a Y if yes. It looks like maybe you had a stroke at the end of what you were typing up there. Or maybe you were watching the movie “Sssss” and trying to tell us? We’re concerned.

Anonymous said...

Who said anything about race? And yes, I know people around here believe in unfettered capitalism, so screw the little guy, right. Suckers are easy marks who deserve to be taken advantage of. That’s the American way.

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