AUBURN - They seem to be popping up everywhere.

The arrival of Aaron Rents Inc. on Grant Avenue brings the number of rent-to-own stores in the Auburn area up to five.

Although the number might seem surprising for a community this size, Auburn is actually part of a growing national trend. The combination of the RTO industry's work to improve its image and the weak economy have led to a nationwide surge.

"In my personal opinion, there are a lot," Rent-A-Center manager David Rustay said.

Rustay thinks it's due, at least in part, to the spirit of entrepreneurship in the community. Employees, who cut their teeth at the major companies, have branched out on their own.

Both Joe Catalfano and Jay Kilmer, the owners of Quality Rentals in the old Nolans sporting goods store, were former employees of Rent-A-Center, or Renter's Choice as it was previously known. The artners opened at their new location last month.

"I think the market place here in Auburn is very attractive to the rent-to-own industry, demographically and economically speaking," Rustay said.

The RTO business nationwide has grown, he pointed out, "because the country's economy as a whole is not what it was five years ago."

Higher taxes and an increased cost of living, coupled with lower salaries and less job security mean that people have less money to spend on furniture, electronics and appliances.

"To spend $500 to $1,000 on a purchase is difficult. But these items are still considered 'necessities,'" Rustay said. "They're what makes your home."

"And people still want high quality merchandise," Rustay pointed out.

The RTO market is a lot different now than when Rustay started out in 1990 at ColorTyme, "one of the originals."

Rustay took a break from the business in 1996. He was a sales manager for an insurance company and owner of Doc's Pizzeria and Fish Fry in Camillus before getting back into the RTO business last year at the request of a former colleague who's a regional director for Rent-A-Center.

Different payment plans, like Rent-A-Center's "90 day same as cash" option that works like a reverse lay-away plan, allow customers to finance purchases to suit their individual financial needs.

"A lot of different situations" occur that bring customers in the doors, Rustay said, not just being financially strapped. Some people are renting an appliance, while their own is in for repairs. Others have vacation rentals and are looking for an extra bed or couch. There are also people who are living in the area temporarily, for instance those working on seasonal construction projects or spend a portion of time in the city on company business.

"They want to feel like they're at home," Rustay said.

The industry in general is trying to improve its image in an attempt to tap more customers. The rent-to-own demographic profile in America shows a potential customer base of 45 million Americans, according to the U.S. Census Bureau. But according to the Association of Progressive Rental Organizations statistics, the industry is penetrating only 2.7 million customers annually.

APRO is the national trade association devoted to the rental-purchase industry, which is composed of businesses that rent furniture, appliances, computers, jewelry and other home products with an option of ownership. Also known as rent-to-own, it's a $6.23 billion-a-year industry with 8,300 stores in the U.S. serving close to 3 million customers (households) a year.

Rent-to-own transactions sprang up in the 1960s in response to a growing consumer need for acquiring the use of household products without incurring debt or jeopardizing the family's credit.

But the RTO industry's customer base has remained stagnant or dropped in the past 10 years, spurring APRO to hire Trenholm Research to conduct a comprehensive survey in 1997, then again in 2004, to determine the image of the rent-to-own industry with customers who fit the RTO demographics but do not rent-to-own. The company was also tasked with creating a marketing blueprint to recruit new customers.

"Rent-to-own is on the right track, but still has a long way to go," Trenholm Research Marketing Analyst Linda Trenholm reported.

"Although the current groups corroborated the poor image concerns voiced five to six years earlier, the magnitude and strength of the negativity appears to have softened especially with pricing and collections.

"Attitudes toward RTO shifted dramatically when participants were educated about rent-to-own. The most important image correction to generate interest in rent-to-own is to promote the no-obligation feature of rent-to-own."

"The no-obligation feature is the cornerstone of the rent-to-own industry, both in law and in the stores," said APRO President Shannon Strunk. "For the public to have a misunderstanding of our very nature makes me want to re-think my advertising and marketing strategy. We may need to go back to the basics when promoting the rent-to-own concept to the public."

The demand for RTOs seems to be on the rise, though.

Aaron Rents Inc., founded in 1955 and based in Georgia, is the leader in the rental, lease ownership and specialty retailing of residential and office furniture, consumer electronics and home appliances. The company announced record revenues and earnings for the third quarter of 2004. Revenues increased 23 percent to $231.6 million compared with $188.4 million for the third quarter of 2003.

For the same quarter, Rent-A-Center, which operates 2,870 stores in the U.S., announced a more modest 3.6 percent increase in revenues for the same quarter. The numbers, however, don't reflect the rapid growth of the chain, which is fast eating up its smaller competition. During the past year, it acquired 124 stores from Rainbow Rentals in February and 90 stores from Rent Rite in April.

Rent-A-Center, named by Forbes as one of the best managed companies in its Platinum 400 Rookie Series, has two locations in Auburn.

"It's not at all unusual for us to have two or more stores in the same city, sometimes even within one mile of each other," said Mary Gazioglu, the company's manager of corporate communications. It all depends on "if the demand is there. We look to see if there's a need for RTOs to give consumers an option."

The company looks for a certain demographic as well.

"Most RTO customers are generally within the $15,000 to $50,000 income range and tend to be female," Gazioglu said. Furniture is the fastest moving rental item, followed by electronics, she said. Big screen televisions are becoming increasingly popular, especially when there's a big sports game or around Superbowl season. In the face of obsolete technology, students or their parents are also renting computers more.

Staff writer Mary Bulkot can be reached at 253-5311 ext. 235 or mary.bulkot@lee.net