• Clint Engel

Rent-A-Center names Speese CEO, outlines growth plans

The rent-to-own giant aims for higher tickets, broader consumer base

PLANO, Texas — Rent-A-Center named Mark Speese CEO today and announced a new strategic plan focused on strengthening both its core rent-to-own store AcceptanceNow businesses.

Speese, founder and chairman of the Plano-Texas-based company, was named interim CEO in January.

“He has played an essential role in the creation of our new strategic plan as well as the numerous efforts we’ve undertaken to drive growth and profitability in the business,” Steven Pepper, lead independent director, said in a release.

“As we take the next steps with the execution of our initiatives, the entire board believes it is important for Mark to continue to lead the organization forward. I am confident that his deep industry and operational expertise and bold vision will enable Rent-A-Center to improve its trajectory and deliver enhanced value to our stockholders.”

In outlining its growth strategy, the company said it is going after bigger tickets with better-end goods targeting a wider spectrum of consumers and strengthening its e-commerce business, among other things.

At Rent-A-Center, it is reestablishing a former pricing strategy and implementing shorter and alternative terms aiming to increase product ownership from about 25% to 40%.

At ANow, it’s also implementing shorter terms, menu-based pricing and early purchase options to incentivize ownership; and using “packaging concepts that maintain affordability,” the company said in its release.

In addition, Rent-A-Center said it is shifting the concentration of “higher-end, aspirational products” to 65% of the mix from 45% across categories; increasing average tickets and leveraging its e-commerce platform to enable special orders and extending-aisle offerings.

The company also said moves to stabilize and upgrade its workforce are working. It has created more full-time positions and is “intensifying focus on co-worker development, and since the launch of the initiatives, turnover has improved for five consecutive months, the company said.

Rent-A-Center also working to improve underperforming stores by “rightsizing” employee headcounts across locations, improving inventory visibility, moving idle inventory more quick and testing alternative business hours.

At ANOW it aiming to improve service and profitability by offering multiple relationship and service levels, “modifying business-to-business transaction economics and leveraging retail partner exclusivities,” the company said.

It’s also centralizing account management and building out its unstaffed capabilities to better scale operations and lower costs; and its “enhancing decision engine and risk analytics to reduce losses and increases ownership.

On the e-commerce front, Rent-A-Center said it’s in expanding its offering and mobile applications and leveraging its new, cloud-based point-of-sale platform to manage orders and operating costs.

With the combined initiatives, Rent-A-Center is targeting 2018 earnings per share in the $120 to $1.40 range and 2019 earnings per share of $2 to $2.25.

Steve McKinley, vice president sales, client relations for ANow said today’s announcement “reinforces AcceptanceNow’s commitment to our current retail partners.”

“Our strategy is as strong as it has ever been, and Mark’s vision to drive growth for AcceptanceNow not only benefits our organization but all the thousands of customers we will support for our retail partners,” he said.

Clint EngelClint Engel | Senior Retail Editor, Furniture Today

Please feel free to email or call me with all of your retail news and tips, including expansion news, successful merchandising and marketing strategies and anything else you would like to see covered by Furniture/Today.  Contact me directly at cengel@furnituretoday.com or 336-605-1129.

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