Profile: Rent-A-Center Inc (RCII.O)
17 May 2013
Rent-A-Center, Inc., incorporated in 1986, is a rent-to-own operator in North America. It provides the customers the ownership of durable products, such as consumer electronics, appliances, computers, furniture and accessories, under rental purchase agreements with no long-term obligation. The Company operates in four segments: Core U.S., RAC Acceptance, International and ColorTyme. Its Core U.S. segment consists of its Company-owned stores located in the United States and Puerto Rico. Through the Company’s RAC Acceptance segment, it provides an onsite rent-to-own option at a third-party retailer’s location. Its International segment consists of Company-owned store locations in Canada and Mexico. ColorTyme is the Company’s nationwide franchisor of rent-to-own stores. On December 31, 2012, easyhome Ltd exchanged stores with the Company.
The Company’s customers may make weekly, semi-monthly or monthly payments, in its stores, kiosks, online or by telephone. It offers same day or 24-hour delivery and installation of its merchandise. It provides any required service or repair. Repair services are provided through its network of service centers. If the product cannot be repaired at the customer’s residence, the Company provides a temporary replacement while the product is being repaired.
During the year ended December 31, 2011, the Company’s Core U.S. segment consisted of approximately 91% of its consolidated net revenues and all of its net earnings. As of December 31, 2011, the Company operated 2,994 Company-owned stores nationwide and in Puerto Rico, including 39 retail installment sales stores under the names, such as Get It Now and Home Choice.
Each RAC Acceptance kiosk location consists of an area with a computer, desk and chairs. As of December 31, 2011, the Company operated 750 kiosk locations inside furniture and electronics retailers located in 34 states and Puerto Rico.
The Company is expanding its International segment operations in Canada and Mexico. As of December 31, 2011, it operated 28 stores in Canada and operated 52 stores in Mexico.
As of December 31, 2011, ColorTyme franchised 216 stores in 33 states. These rent-to-own stores primarily offer durable products, such as consumer electronics, appliances, computers, furniture and accessories. During 2011, 10 new franchise locations were added, three locations were acquired, three locations were sold (all of which we purchased) and three locations were closed. All of the ColorTyme franchised stores use ColorTyme’s trade names, service marks, trademarks and logos. ColorTyme’s primary source of revenue is the sale of rental merchandise to its franchisees who, in turn, offer the merchandise to the general public for rent or purchase under a rent-to-own transaction.
Rent-A-Center Store Operations
The Company’s Core U.S. stores average approximately 4,700 square feet and are located primarily in strip centers. RAC Acceptance kiosks are located within the premises of third-party retailers. Consumer electronic products offered by its stores include high definition televisions, home theatre systems, video game consoles and stereos from manufacturers, such as Sony, Philips, LG, Panasonic, Toshiba, Mitsubishi and Microsoft. It offers major appliances manufactured by Whirlpool, including refrigerators, freezers, washing machines, dryers, and ranges. The Company offers desktop, laptop and tablet computers from Toshiba, Sony, Hewlett-Packard, Dell, Acer, Compaq and Apple.
The Company offers a range of furniture products, including dining room, living room and bedroom furniture. The Company offers furniture made by Ashley, England, Standard, Albany, Klaussner and other brand manufacturers. Accessories include lamps and tables and are rented as part of a package of items, such as a complete room of furniture. Showroom displays enable customers to visualize how the product will look in their homes and provide a showcase for accessories. RAC Acceptance locations offer the merchandise as available at the applicable third-party retailer.
5501 Headquarters Drive
PLANO TX 75024