Easyhome sets U.S. RTO push
By Michael J. Knell -- Furniture Today, March 11, 2007
Edmonton, Alberta — Easyhome will enter the U.S. market this year after signing a master franchise agreement with former Rent-A-Center executive Walter "Bud" Gates.
"The time is ripe for us to launch in the U.S.," said David Ingram, president and CEO of Canada's largest furniture and home goods rent-to-own merchant, in a conference call with analysts to discuss 2006 results.
"We plan to open two or three corporate stores in states that border Canada in 2007, an initiative that will be complemented by a franchise agreement we have concluded with an entity controlled by Bud Gates," said Ingram.
Gates will have the right to grant franchise territories in the 38 states that do not share a border with Canada. Easyhome will retain its right in the remaining 12, which run from Alaska to Maine.
Ingram said the United States, with more than 8,000 RTO stores and annual revenues of $6.2 billion, "is not a market that we could overlook."
In Canada, Easyhome operated 191 stores at the end of 2006, and has been expanding its network there over the past three years. It plans to add at least another 21 Canadian stores this year.
With 2006 revenues of C$119.6 million, Easyhome is the third-largest RTO furniture merchant in North America, although it is far smaller than industry leader Rent-A-Center and No. 2 Aaron Rents.
Ingram said the first U.S. Easyhome store will open in New York state this year. He did not disclose the city, but said it wasn't Buffalo.
He added that Gates will help the company open in other states. "He can attract capital to the Easyhome brand," Ingram said.
Gates is a former chairman and CEO of Rent-A-Center, Ingram said, and has been successful in franchising in the RTO and food industries.
"We have already launched licensing in Canada and we are comfortable with it. This strategy will permit us to expand much more rapidly than if we were to grow the American business on our own, and it minimizes our financial risk while presenting us with a huge potential upside," said Ingram.
He said Gates will not sell individual store franchises, but rather territories that can support a number of locations. "His ambition is to have hundreds of stores," Ingram said.
The company also believes it will differ from its competitors in its approach to marketing, merchandising and product presentation, which is more lifestyle-oriented.
In addition, Easyhome said it plans to hire its first-ever director of franchises to oversee expansion of operations in both the United States and Canada.
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Canada’s Easyhome to open U.S. stores
Mar 8, 2007
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