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Aaron’s Sales and Lease– whose typical store interior is shown here – is looking to open a comparatively smaller 7,000 square foot store in Yellowknife by the winter or spring of 2009, according to the company’s director of franchising for Canada. - photo courtesy of David Fitzgerald

SOMBA K'E/YELLOWKNIFE - A growing lease-to-own furniture and appliance business is setting is sights on Yellowknife.

Doug Warren, director of franchising in Canada for Aaron's Sales and Lease, said with 17 locations in Canada and more than 110 Canadian franchises sold in the last two years, he hopes to find a franchisee in Yellowknife to open a store next year.

"It's a market we're very interested in," said Warren of Yellowknife. "It's growing. It's got a blue collar-type element to it. The demographics just fit with what Aaron's wants to do."

Aaron's, which according to Warren, does $2 billion dollars in yearly sales, looks like any other furniture and appliance store with furniture taking up 70 per cent of the lot, and TVs, computers and other electronics - all from name brands - accounting for the rest of the store's inventory.

But the method of payment for customers is distinctly different from most retail outfits, said Warren.

"They put down a first payment. Their only obligation to us is just to make the next payment the next month, and so on."

Warren said the system is flexible for people who want name brand products but don't have the means to pay the full price up front.

"The concept is for people that don't want to take on any extra credit, who have maybe compromised their credit, who don't have enough cash to pay $1,700 for a flat screen TV - but would like to pay it off over 12, 18 or 24 months - with a premium attached to that, of course," said Warren.

The system has its rules. If a customer misses a payment and, after a grace period, cannot ultimately pay for the item, Aaron's will reclaim it, using drivers or PTs - the latter being short for "product technicians" - who also double as showroom salespersons.

Aaron's write-off rate, including lost or damaged goods, is about one percent, Warren said.

Staff at a Yellowknife Aaron's - which Warren hopes to see open in the winter or spring of 2009 - will likely number five to begin with, later expanding to about nine.

"What makes Aaron's extremely profitable, at the end of the day, is the labour costs are relatively low.

"We don't have to do 900 transactions a day, like a Tim Hortons, to make a lot of money. And yet our average revenue is as high as them."

Warren could not divulge potential sites for the 7,000 square foot, $400,000 store, but said, "We tend to locate on the main commercial strip."

No franchisees have stepped up yet, but Warren said he has an interested candidate looking to open an Aaron's in Whitehorse.