To this end, ACE sought to acquire Check Express, another large check-cashing chain, in 1991

To this end, ACE sought to acquire Check Express, another large check-cashing chain, in 1991

Expansion: 1988-97

From its inception, ACE had to find its way in this shifting financial services landscape. , a network of pawn shops eager to erica eventually abandoned the acquisition because of concerns on Wall Street that the company was venturing too far afield from its core pawn shop business. In the aftermath of Cash America ‘ s bid, ACE president Don Neustadt and chairman and CEO Ray Hemmig made expansion the company ‘ s top priority in an effort to maintain ACE ‘ s leading position in an increasingly competitive industry.

Consistent with its focus on swift East Liverpool payday loans growth, ACE opened 52 new stores between 1987 and 1989. By 1990, ACE reported revenue of $16.6 million. Although its operations were still highly concentrated in Texas and Colorado, the company also searched for opportunities to enter additional markets. Strongly positioned in the southeast, Check Express offered ACE a foothold into new regions. The deal was rejected, however, by Check Express ‘ s board of directors in November 1991. ACE ‘ s sales for the year rose to $20 million nevertheless.

Even more tumultuous was the fact that the company quickly had to fend off a 1987 takeover attempt by Cash America International Inc

Spurned by Check Express, ACE opted to fuel its growth with a public stock offering instead. In December 1992 the company sold 1.5 million shares (earning $15.3 million in the process), and then launched an ambitious store-building plan early in 1993. Although it had been opening an impressive average of 30 new stores each year since 1987, the company planned to increase that number to 50. In fact, as Hemmig revealed to the Wall Street Transcript in 1993, “ We hope to double the size of our company in the next five years. ” ACE ‘ s agenda was twofold. In addition to venturing into new regions, it sought to bolster its presence in its current e plan is to cover a market from north to south, from east to west, ” Hemmig told the Dallas Morning News. Moreover, despite the difficulties it had experienced with the Check Express deal, ACE did not forego acquisitions. In November 1993 ACE successfully purchased Mr. Money – a 23-store check-cashing chain well established in Georgia – for $4.1 million. By the year ‘ s end, ACE ‘ s roster of check cashers had grown to more than 300, and it had locations in ten states and the District of Columbia and was more than twice the size of its nearest competitor. Even more impressive were the company ‘ s soaring sales, which rose to $32.7 million in 1993, as well as its net income, which surged 62 percent the same year.

ACE ‘ s expansion strategy was not limited to opening new stores, though. The company also developed new services in an effort both to raise revenue and to win the repeat business of its clients. In 1990 ACE had introduced electronic tax filing, which proved popular among customers willing to pay a fee to receive quicker tax refunds. By 1993, tax filing had become ACE ‘ s third largest revenue source, trailing only check cashing and money order sales. Also in 1993, ACE entered the nascent pre-paid services market, when it began to offer pre-paid long distance phone cards at its check-cashing stores. Nevertheless, check cashing remained the staple of ACE ‘ s earnings, accounting for about 90 percent of its business. To minimize its risk from check fraud, ACE implemented a $2.5 million computer point-of-sale system in 1993, linking each store to the company ‘ s headquarters. The system also allowed ACE to track its consumers ‘ transaction histories. “ It gives us a greater control of the business and the ability to anticipate trends [in] customer behavior, ” Hemmig explained to the Dallas Morning News.