ATLANTA, Aug. 31 /PRNewswire-FirstCall/ -- Aaron Rents, Inc. (NYSE: RNT),
the nation's leader in the rental, sales and lease ownership, and specialty
retailing of residential and office furniture, consumer electronics and home
appliances and accessories, today stated that it is currently assessing the
impact of Hurricane Katrina on the operations of its stores in Louisiana,
Mississippi, and Alabama. Preliminary reports indicate that the damage to
these stores will be significant.
As of today, 20 Aaron's Sales & Lease Ownership stores are closed and 12
stores in Louisiana and Mississippi are either underwater or have significant
water damage.
"Our foremost concern is the safety and well being of our employees and
customers, as well as all of the citizens of the affected areas," said R.
Charles Loudermilk, Sr. Chairman and Chief Executive Officer of Aaron Rents.
"The current difficulty in communicating to our employees and getting to many
of the stores has made an accurate assessment of the damage impossible at this
time. It could be weeks or months before the actual cost of the hurricane can
be determined."
Aaron Rents currently has 46 stores in Louisiana, 25 stores in
Mississippi, and 34 stores in Alabama. Of these stores, one store in
Louisiana, five stores in Mississippi, and 16 stores in Alabama are franchised
operations. The most severely effected stores at this time are eight Company-
operated stores in the New Orleans area and three Company-operated stores and
a franchised store on the Mississippi coast. Based upon a very preliminary
assessment, total property loss and business interruption expense for all of
the stores affected by the hurricane could range from $5,000,000 to
$10,000,000. This loss would include insured losses of merchandise, property,
and other contents at store locations in addition to uninsured losses of
merchandise in customer's homes. In addition, although not possible to
accurately estimate at this time, a significant amount of ongoing business
will be lost for a substantial period of time at the most seriously damaged
stores. The current total average monthly revenue at the above-mentioned New
Orleans and coastal Mississippi stores is approximately $1,100,000 per month.
"Our business was adversely impacted somewhat in the third quarter of last
year by the three hurricanes in Florida," Mr. Loudermilk, Sr. continued.
"However, those hurricanes did not have the significant widespread flooding
and water damage these communities are experiencing from Katrina. Our history
on past major hurricanes, such as Hurricane Andrew a number of years ago, is
that our business substantially picks up three to six months after the storm
occurs as customers, many with the aid of government assistance, return to
homes and need replacement furnishings."
The Company is designating $200,000 of funds in the Aaron's Community
Outreach Program for assistance to Company employees affected by the hurricane
and is also donating 50,000 cases of bottled water to the American Red Cross.
Aaron Rents, Inc. based in Atlanta, currently has more than 1,135 Company-
operated and franchised stores in 46 states, Canada, and Puerto Rico for the
rental and sale of residential and office furniture, accessories, consumer
electronics and household appliances. The Company also manufactures furniture,
bedding and accessories at 10 facilities in four states.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: Statements in this news release regarding Aaron Rents, Inc.'s
business which are not historical facts are "forward-looking statements" that
involve risks and uncertainties which could cause actual results to differ
materially from those contained in the forward-looking statements. These
risks and uncertainties include factors such as changes in general economic
conditions, competition, pricing, customer demand and other issues, and the
risks and uncertainties discussed under "Certain Factors Affecting Forward
Looking Statements" in the Company's Annual Report on Form 10-K for fiscal
2004, which discussion is incorporated herein by this reference.
SOURCE Aaron Rents, Inc.
CONTACT:
Gilbert L. Danielson
Executive Vice President, Chief Financial Officer
Aaron Rents, Inc.
+1-404-231-0011, x3334
Web site: http://www.aaronrents.com
(RNT)