Rent-A-Center’s back-to-basics comeback plan
Rental companies make their money renting, not retailing. But there’s an announced shift at Plano, Texas-based Rent-A-Center to turn more customers from renters into owners.
Or in CEO speak: “to enable higher rates of ownership.”
That’s one of the strategies taking shape at the nation’s largest rent-to-own operator, as the company unveils a new strategic plan and the return of Chairman and founder Mark Speese to the CEO role.
The moves come following a disappointing 2016, in which the company’s total revenues declined to $2.96 billion, down from $3.28 billion in 2015. Before income taxes, the company lost $113 million in the last fiscal year.
Speese’s appointment took effect April 10, and he wasted little time before hammering on the company’s value proposition and core values.
"We recognize that significant improvement is needed," said Speese. "We are renewing our focus on what made Rent-A-Center an industry leader — starting with enhancing the value proposition of our offerings to increase customer satisfaction and enable higher rates of ownership."
The high-minded focus of the company, according to its boilerplate, is to improve the quality of life for its customers by providing them the opportunity to obtain ownership of high-quality, durable products such as consumer electronics, appliances, computers, furniture and accessories, under flexible rental purchase agreements with no long-term obligation.
Speese says the new plan renews the focus on what made Rent-A-Center a leader — “starting with enhancing the value proposition of our offerings to increase customer satisfaction and enable higher rates of ownership.”
One way it intends to boost the ownership rate is through improved early payout options and shorter terms that promote ownership. The company expects the moves to boost ownership from about 25% to 40%.
Other improvements include:
- Optimizing the product mix to better meet customer demand;
- Stabilizing and upgrading the workforce to improve customer relationships;
- Improving account management practices to lower delinquency rates; and
- Optimizing the exiting physical footprint — a step that includes “rightsizing the number of employees across locations.”
Speese appointed Rent-A-Center CEO, again
Rent-A-Center, the nation's largest rent-to-own operator, today announced that its board of directors has unanimously appointed Mark Speese as the company’s CEO, effective April 10. Speese, already chairman of the board of directors and the company’s founder and former CEO, has served as interim CEO since Jan. 9.
“As a founder, I look forward to continuing the great work underway across Rent-A-Center, in order to return the company to a position of strength,” Speese said. “Since assuming the role of Interim CEO earlier this year, we have taken decisive actions to drive operational improvements for the benefit of all Rent-A-Center stakeholders, and remain committed to improving the lives of our customers with our unique value proposition.”
He served as the Company’s CEO from October 2001 until January 2014.
Consumer electronics retailer to close all stores
The going-out-of-business sales have started at Hhgregg.
The bankrupt retailer began liquidating its assets on Saturday, April 8, after failing to find a buyer. The chain said it expects to close all of its 220 stores by the end of May.
“Since filing for financial protection under Chapter 11 of the Bankruptcy code on March 6, 2017, we have continued to fight for the future of our company,” said Bob Riesbeck, president and CEO, Hhgregg. “While we had discussions with more than 50 private equity firms, strategic buyers, and other investors, unfortunately, we were unsuccessful in our plan to secure a viable buyer of the business on a going-concern basis within the expedited timeline set by our creditors.”
Based in Indianapolis, Hhgregg was founded in 1955 by Henry Harold Gregg. It has reported losses for the past two years, challenged by online competition and discounters.
The retailer said it entered into a consulting agreement with a contractual joint venture comprised of Tiger Capital Group, LLC and Great American Group to conduct a sale of the merchandise and furniture, fixtures and equipment located at Hhgreggg’s stores and distribution centers.