Fifty Years And A Billion Dollars Later
Aaron Rents, Inc., founded by Atlanta native R. Charles Loudermilk, Sr. in 1955 with a $500 bank loan, passed the billion-dollar mark last year. The company, which leases furniture and appliances, went public in 1982 and began a successful franchise program in 1992. Loudermilk is chairman and CEO of the company; his son, Robert C. "Robin" Loudermilk, Jr., is president and chief operating officer.
Charlie Loudermilk has been a pillar of Atlanta's civic community for decades; he has given several million dollars to charitable endeavors and educational institutions, including his alma mater, the University of North Carolina. He is founder and past chairman of the Buckhead Coalition and has been on the boards of the Piedmont Hospital Foundation, the Atlanta Community Food Bank and the Lovett School. He was a member of the group that built the Omni in Atlanta and once owned the Atlanta Hawks and the Flames.
Loudermilk talked to Editor Susan Percy in his Buckhead office. Following are highlights from the interview.
GT: What does it take to be successful in business for 50 years?
Loudermilk: I think the number one thing is people skills. You've got to love the people and in turn they love you. There's just so much one person can do. We've got a tremendous team here.
GT: Aaron Rents really isn't just a rental company anymore, is it? How would you describe it?
Loudermilk: We have invented through the years a new hybrid, a way to get home necessities to people. About half of them are credit-constrained. The other half - they like the idea of renting to see if they like the product or to have the ability to turn it back any time they want to. But we're not the weekly-pay, chase-them-every-Saturday-night, rent-to-own operation. We say we're sales and lease ownership. It's a simple program in that somebody comes in and leases an item for a month. They can send it back at the end of the month or they can pay another month's rent. If they pay 12 months, generally, it's theirs. We don't charge a security deposit; we don't charge a delivery or pickup fee. It's really just a new mousetrap, a way of getting household products to the consumer. We're growing at the rate of about 20 percent a year. I don't know another large chain operator that's growing at 20 percent a year. Last year we surpassed the billion mark - top line. Bottom line, we were about $85 million before tax. It's a big machine moving very fast right now.
GT: What are the top rental items?
Loudermilk: The number one item is a big-screen television. We have probably 130,000 to 140,000 of them out to rent. The number two item to rent is a computer - we're a very large Dell distributor.
GT: Did you really get started in business by renting out 300 folding chairs, or is that just a story?
Loudermilk: Oh, no, it's very true - I rented them for 10 cents a day [per chair] to an auction out here on West Paces Ferry.
GT: How did the company grow from that point?
Loudermilk: Then we had tables and china and silver and chafing dishes and candelabras, everything for a party. We dealt primarily with caterers. Then we went into hospital equipment - wheelchairs and beds and so forth. We were a big player in that. But then I heard about furniture rental and started researching it. We bought 10 groups of furniture - living room, bedroom, dining room.
GT: And at some point you got into manufacturing?
Loudermilk: Back when Lockheed was gearing up for the big C5A [airplane] production, they brought engineers in from all over the world and we were renting the furniture for these people. We couldn't get the furniture, so I decided to go into manufacturing. I want to always control as many things in my life as I possibly can. This year we will manufacture over $100 million worth of furniture, all used in our stores. We sell to no one outside the Aaron community.
GT: What prompted you to take the company public?
Loudermilk: You won't believe this, but I'm a quail hunter. A group of us for years leased land to hunt on in South Georgia. Rankin Smith was one of our group, and he bought a place down in Thomasville. I decided I would really love to have a hunting place. The only way I could afford to do that was to go public. As we were growing, we were eating up all the internal funds and all we could borrow to promote the company and to grow. There was just no cash left for me to buy a toy. It's called Woodhaven Plantation. It's 4,500 acres.
GT: So going public was a good decision?
Loudermilk: We went public 25 years ago. If someone had invested $1,000 it would be worth over $18,000 today.
GT: Is there anything in particular that has helped you in your career?
Loudermilk: I've been very healthy. If I'd had bad health I couldn't have grown this business.
GT: You're known for your philanthropy. With all the worthy causes out there, how do you decide which ones to support?
Loudermilk: One day I counted. I had eight solicitations for funds. You have to really look at each one. Ninety percent of them are very worthy. Personally, I've taken a position that I want to give bricks and mortar. I've given to Chapel Hill and to a hospital down in Thomasville - Archbold, to Lovett School, to Piedmont College, to a building downtown - the United Way Building. My feeling is that you provide the facility and it's up to the operators to make something out of it. The only way I broke with that was that I gave Georgia State half a million for the Andrew Young School.
GT: How did you come to donate money for the baseball complex at Piedmont College?
Loudermilk: My dad was raised in Demorest. He played baseball there. One of the famous names of baseball is [Demorest's] Johnny Mize, and Johnny Mize's mother was a Loudermilk. Johnny Mize and my father were cousins. I used to go up there in the summertime and visit my grandfather.
GT: Weren't you involved in Andrew Young's campaign for mayor?
Loudermilk: I was co-chairman of the campaign. That was an unusual time in my life - me being a conservative white Republican and Young a black liberal Democrat. But Andy and I have been close friends for years back. He was the right man at the right time for that job. I think he did a fabulous job for eight years as mayor. The great things that Shirley Franklin is doing today - a lot of them she learned from Andrew Young. And that's a compliment to them both. I'm very high on what Shirley's doing and Shirley herself and how she's approaching things.
GT: Did your work with Andrew Young surprise any of your business associates?
Loudermilk: It was not a real popular thing, in the white business community, for me to support Andy.
GT: It's been pretty well accepted that to be successful in Atlanta in business you have to become involved in the community. Is that changing?
Loudermilk: I think it is changing dramatically to the detriment of Atlanta. I have a real concern now about Atlanta's leadership. At one time we had a group called the Action Forum - about 20 white successful businesspeople and 20 black successful businesspeople. It really was an effort to bring the black community into the mainstream of what was happening in Atlanta. I was brought in by the black community because I supported Andy. The people in there, particularly from the white community, were the owners, chairmen, presidents of the companies. So when they made a decision at the Saturday meeting, they didn't have to go and ask anyone whether it would work or not.
We don't have that today. Our banks have left us, all except one. Coca-Cola has its problems today, and it's not providing the leadership that Woodruff and Goizueta and that group did. Delta - we all know Delta's problems, and they don't really have the time to put toward the community affairs. And now Georgia-Pacific has been sold, and I think you'll see Pete Correll moving out of the effort. They just keep going. We're losing these strong leaders in Atlanta.
GT: Is anybody stepping up to take their place?
Loudermilk: I don't see a number of 40- or 50-year-olds coming up to take this leadership role. I hope they will. The young whites have been moved out of the political arena by the black community. I think we have a void here. I think what's tragic is that the Northside white community had a lot of bright young people, well-educated, who loved the city, would love to help, and have the resources. But they've really been moved out or they feel they have been moved out.
GT: Do you think that's a permanent condition?
Loudermilk: Shirley Franklin and her leadership - I think Lisa Borders will be the next mayor. With [Shirley's and] Lisa's leadership all this will be put back together. Hopefully, we're just in a trough right now. I think they realize the assets that Atlanta has that have not been utilized for 30 or 40 years. So maybe you'll see some people coming up the ladder. Two that come to mind - a fellow named David Allman [president of Regents Partners and chairman of the Buckhead Community Improvement District] and my son Robin Loudermilk. I'm sure there are others - those are just two that I'm close to.
GT: Are you optimistic about Atlanta?
Loudermilk: Yes, I am. We lived through eight years of Bill Campbell. The thing is, Atlanta still has tremendous assets - location, the airport. It just needs strong leadership, and Shirley is providing that. Shirley's been a great leader. Some leaders have to run through people and over people. Shirley's done it by brains and charm. She hasn't had to hammer people.
GT: Who are your heroes, or people you look up to?
Loudermilk: There's a person named Fritz Orr who had a camp here. I was fortunate enough to go for eight years to his camp. His camp was where Westminster is today. I was fortunate because my mother ran the dining room there. He let me come out with her. He was really a fine role model and a mentor. I was raised in a blue-collar community off of Howell Mill Road. My dad was a lineman for Georgia Power. It was a great upbringing, but we didn't have any material things to speak of. My mother was the hardest-working person I've ever known, and she was determined that my brother and I were going to college. My mother died in '96, a very happy woman in that her dream had been fulfilled that her two boys had a great life.
GT: Anybody in business or public life that you admire?
Loudermilk: You'd have to put Martin Luther King in there because of the nonviolence. This country was in deep trouble from a violence point of view between the races, and what I see he did was to calm that down.
There are a number of businesspeople I admire - Sam Walton and Jack Welch. How could you not admire the two of them? And the founders of Home Depot. On a much, much, much larger scale they did what Aaron Rents has done. They found a niche. They found a new model, so to speak. Home Depot doesn't sell anything that wasn't sold before they came into business. They just found out how the customer wanted it - in one big warehouse. That's what we've done. We've found how the customer wants our products and wants to pay for them.