Share this on

Rent-A-Center plans to close 280 stores

Move expected to boost operating income

By Furniture Today Staff -- Furniture Today, December 4, 2007

PLANO, Texas — Rent-A-Center said Monday it plans to close 280 stores within the next 90 days, or about 8% of its total units, in a move that is expected to boost operating income.

The stores to be shuttered generate about $140 million in revenues for the rent-to-own retailer, but the company said it will transfer rental purchase agreements to other stores and expects to retain most of them.

Rent-A-Center said it will take pre-tax restructuring charges of $36 million to $45 million in the current quarter, for costs including lease terminations and fixed asset disposal. It said it also expects it will have a cash outlay of $26 million to $30.5 million over the next 12 to 18 months associated with the move.

After the restructuring, it expects its operating income will increase by $2 million to $2.5 million a month.

“We continually analyze every aspect of our business in an effort to improve operating and financial performance,” said Mark Speese, Rent-A-Center chairman and CEO. “Accordingly, we evaluated every market in which we operate based on operating results, competitive positioning and growth potential. As a result, we identified approximately 280 stores that we intend to close and merge with existing Rent-A-Center stores within the next 90 days.”

Rent-A-Center acquired competitor Rent-Way just over a year ago, a move that led to a 20.9% revenue gain for the company in the most recent quarter, ended Sept. 30. Same-store revenues in the quarter were down 1.8%, however, and net earnings were up just 0.1%.

Share this on

Rent-A-Center closing 280 stores

Dec 9, 2007

Also by this author

Also by Staff Staff

Featured Company

FurnitureCore.com

FurnitureCore.com is a dynamic web application aimed at the furniture industry. Retailers and manufacturers alike will find our deep reserve of tools to be exactly what their furniture business needs.www.furniturecore.com... more

Related Resources

Atlanta International Gift & Home Furnishings Market

Here is a selection of products shown at this month's International Gift & Home Furnishings Market here.

Networking at the 13th annual F/T Leadership Conference

NAPLES, Fla. — Industry executives and guests took the opportunity to network and play golf during down time at Furniture/Today's 13th annual Leadership Conference here this month.