Rent-A-Center has appointed Mark Speese to the CEO role and launched a new strategic plan developed to restore growth, improve profitability and maximize value by strengthening the core business in the United States while growing its AcceptanceNow business and leveraging technology investments.
A Rent-A-Center founder, Speese has served as the company’s chairman of the board since 2001 and as a board director since 1990. He was the company’s CEO from 2001 until 2014.
In the core business, Rent-A-Center is taking steps to enhance its customer value proposition by establishing a clear path to product ownership. The goal is to better align with customer needs as a way to increase ownership, accelerate inventory turn and improve cash flow in the core business.
Rent-A-Center also plans to optimize the product mix in the core business to better meet customer demand by shifting the concentration of higher-end, aspirational products across categories from 45% to 65%, increasing the average ticket price and leveraging the e-commerce platform to enable special-order and extended-aisle offerings. The company stated that it anticipates expansion of the better/best products assortment to generate higher tickets and improved economics. It also is taking steps to improve account management practices to lower delinquency rates by focusing on training, tools and incentives to resolve store-level execution issues.
The company also is increasing the proportion of full-time labor in its stores to stabilize the workforce and improve customer relationships. Rent-A-Center said it expects the increase in labor costs to be offset by improved execution in sales, customer service and collections.
In the AcceptanceNow business, which operates within retail partner facilities, Rent-A-Center noted that it is implementing shorter agreement terms, menu-based pricing and early purchase option offers to support retention and incentivize ownership. It also is encouraging lease-to-own transactions across customer segments and using packaging concepts that maintain affordability. The company said it would optimize key retail partnerships to deliver improved service and profitability by offering customers multiple relationship options with varying service levels, modifying business-to-business transaction economics and leveraging retail partner exclusivities. The company also will centralize account management, build capabilities that allow it to address opportunities faster and at lower cost, and improve risk management.
In addition, Rent-A-Center asserted that it is taking actions to enhance its omnichannel platform by leveraging investments in digital capabilities to provide a seamless customer experience.
“Rent-A-Center remains focused on our mission to provide cash- and credit-constrained consumers with affordable and flexible access to durable goods that promote a higher quality of living,” Speese said. “While we have a long history of realizing this vision and are well-positioned to build on our core strengths, we recognize that significant improvement is needed. With the actions announced today, many of which are already underway, 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. We have also determined a clear path to strengthen the U.S. core business, build on the recent momentum of AcceptanceNow and leverage our technology capabilities to drive growth in new channels.”