*In Focus: NationsRent

May 1, 2000
Gary Stewart, vice president and chief marketing officer at NationsRent, tells RER what gains the company made in 1999 and what's in store for 2000:RER:

Gary Stewart, vice president and chief marketing officer at NationsRent, tells RER what gains the company made in 1999 and what's in store for 2000:

RER: When the issue of consolidation comes up, NationsRent is almost always mentioned. Can you explain your approach?

Stewart: In 1999, we focused on growing our rental revenue and more than doubled the size of the company through heavy integration and acquisitions. We also added new store openings or warm starts. Rather than enter a new market, we do an acquisition in a targeted area and add new stores to fill out that market.

I think acquisition has slowed down a bit. We haven't seen the companies that fit our strategies. Our most significant acquisitions from last year was with Contractors Equipment Corporation in Southern California, and Holt Equipment and Sylvan in New York, because those two are the largest metropolitan areas.

RER: What exactly is the type of company NationsRent is looking for?

Stewart: The difficulty a company has, first of all, is finding companies to acquire that are a good fit with what NationsRent is trying to do. Second of all, one that makes financial sense. We want to know, is their real estate comparable to our other locations? Can we convert their showrooms to a look more like retail? What kind of customer base do they have? We want to be ageneral rental house and not a niche player.

RER: NationsRent has a newly formed partnership with home improvement retailer Lowe's Companies. What's the anticipated result of this marriage?

Stewart: We definitely are focusing on Lowe's this year. It will open up a new channel of distribution for us, make it more cost-efficient for us to open up new markets. We're going into Lowe's with a store-within-store concept. Lowe's positioning is in line with NationsRent's strategy. For phase one, we're opening six stores for testing. When you go there, there will be a NationsRent store, with the same look and feel as our other stores. The future depends on the results of the first six stores.

RER: The rental industry's story is that it is a high-value stock, but Wall Street does not appear to be listening. Do you think the market will ever pay attention?

Stewart: The market is very enamored with Internet companies right now, but there will be somewhat of a shift to old economy. It will change because when you have companies like NationsRent growing 25 percent a year, people will eventually want part of it. Most Internet companies are not making any money, and there will be a shakeout because those companies are not going to survive. You have to wonder how low you can go before you make a profit.-CC