Hiring - APRO

T H I N K I N G R T OBy ED WINN IIIAPRO’s general counselWhen talking to rental dealers, which Ido every day, I make it a habit to askthem how their business is doing. Iam ever on the watch for trends inrent-to-own that I can attach to largereconomic trends so that we can learn, once andfor all, the exact parts of the economic engine thatdrive the business. Once I possess this informationand have shared it with APRO members, thenwe can all know when to open stores, how much toborrow, how much to buy—and thus help businessgrow at a record-setting pace.I am particularly mindful to ask this questionevery January about December and the fourthGauging the economic tidequarter. It used to be that the fourth quarterwas really big for rent-to-own stores and it stillcan be. Dealers can deliver a lot of product duringthe holiday season. Cash, though, more oftencomes in during the first quarter. The deliveriesstart paying, income tax refunds get spent andthe hope is that the December deliveries do notall get picked up in January. For the 27th year in arow, I have sought the keys to the RTO economickingdom. For the 27th year in a row, those keyshave failed to unlock any magical doors to economicinsight.The reason for this elusive insight is that I havenever gotten consistent answers to my questionsposed to rental dealers. At any given moment, itseems that some rental dealers have just had astellar season/month, some are hangingon by their fingernails as BOR droppedprecipitously and without warning lastseason/month and any number of dealersare treading water—renting and collectingwith nothing to complain about,but nothing to write home about either.It has been that way for 27 years.Dealers have suggested that I exploreregional differences in my surveys. It isprobably a good idea and had I been more scientificwith those I surveyed, I might have learnedsomething useful about regional trends. But mysurveys have depended upon who calls in with alegal issue or some industry gossip. I have nevertalked to the same identifiablesubset of rentaldealers on a regularbasis and sometimeseverybody I talk tocomes from the Southor California or NewYork or wherever dealersare felling legal heat.In any case, I cannotreport on any regionaltrends of late, alas.“Whateverhappens nextto the economyoverall, theefficient,optimistic,well-run shopswill prosper;those with issueswill suffer.”What my non-scientific surveys do consistentlyindicate—and this will not surprise manyof you—is that results depend oninternal company performancemore than anything else. A newadvertising campaign worked or itdidn’t and the ads dictated how thestores performed. Or the companylost two good store managers last month and performanceplummeted. Or the dealer bought toolate or badly or a supplier overcommitted and thedealer did not get the stuff that he ordered untillate in the month. Every time results are outsidethe bell curve, when I drill down a little, the dealersusually have an explanation tied to planning,good or bad, or execution, good or bad, as thereason for the blip, up or down.We are all wondering, of course, whether thefallout from the subprime debacle is going to putthe country into a recession and drive millions ofnew, credit-constrained customers through ourrent-to-own doors. Dealers want to know; stockanalysts want to know; thoughtful and ambitiousemployees want to know.There are going to be lots of consumers whooverbought houses and who will lose those housesand damage their credit. They may come to visitrent-to-own stores, unless, of course, they arenow suddenly crammed into a too-small apartmentand have no immediate need for any more“stuff,” rented or otherwise. We do not know if thecredit card companies are feeling chastened at all,yet. As long as they can keep adding fees and raisingrates, they may be happy to continue pitchingcards and credit to one and all, housing slump bedamned.The common wisdom is that RTO is recession-proof.Recessions do a lot of things, however,and some of those things can hurt our industry.18 PROGRESSIVE RENTALS