Rent-A-Center

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Rent-A-Center
TypePublic
Traded asNASDAQRCII
IndustryHome furnishings
Rent-to-own
FoundedWichita, Kansas, USA (1973)
HeadquartersPlano, Texas, USA
Key peopleRobert D. Davis, CEO, CFO, Treasurer
Mitch Fadel, President and COO
Christopher Korst, Chief Administrative Officer
Theodore DeMarino, Executive Vice President
Ronald DeMoss, General Counsel & Secretary
Joel Mussat, Executive Vice President, Strategic Planning and Business Development[1]
ProductsProvides furniture, electronics, computers and household appliances available under rent-to-own agreements
RevenueIncrease2.882 Billion USD (2012)[2]
Employees18,300 (2011)[3]
Websitewww.rentacenter.com
 
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Rent-A-Center
TypePublic
Traded asNASDAQRCII
IndustryHome furnishings
Rent-to-own
FoundedWichita, Kansas, USA (1973)
HeadquartersPlano, Texas, USA
Key peopleRobert D. Davis, CEO, CFO, Treasurer
Mitch Fadel, President and COO
Christopher Korst, Chief Administrative Officer
Theodore DeMarino, Executive Vice President
Ronald DeMoss, General Counsel & Secretary
Joel Mussat, Executive Vice President, Strategic Planning and Business Development[1]
ProductsProvides furniture, electronics, computers and household appliances available under rent-to-own agreements
RevenueIncrease2.882 Billion USD (2012)[2]
Employees18,300 (2011)[3]
Websitewww.rentacenter.com

Rent-A-Center (commonly referred to as RAC, Rent-A-Centre in Canada) is an American public furniture and electronics rent-to-own company based in Plano, Texas.[4] The company was incorporated in 1986 and as of 2011 operates approximately 3,074 company-owned stores in the United States, Canada, Puerto Rico and Mexico, accounting for 35% of the rent-to-own market in the United States based on store count.[3][4]

Rent-A-Center's operations include 26 retail installment stores called Get It Now (based in Wisconsin); 13 Home Choice stores in Minnesota; 31 rent-to-own stores in Canada that go by Rent-A-Centre and Better Living; and approximately 1,300 Acceptance Now kiosks housed within retail partner stores throughout the United States. Its subsidiary, ColorTyme Inc., is a national franchiser which has 216 stores in 33 states. The company also offers Rent-A-Center Corporate Leasing, which offers short-term rental solutions for businesses that have a need for corporate housing, insurance housing, events, trade shows and home staging.[4][5][6] [7]

In 2010, Fortune Magazine listed Rent-A-Center at number 684 on the Fortune 1000 list of the largest U.S. corporations, based on a composite ranking of revenues, profits, assets market value and other measures.[8] Competitors include Aaron’s, Inc., easyhome, Best Buy Co. Inc., and Wal-Mart Stores.[9]

History[edit]

The rent-to-own business was started by J. Ernest Talley in Wichita, Kansas during the 1960s when he told customers of his store, Mr. T’s Rental, that they had rented a washer and dryer for a long enough duration that they had paid for it in full and now owned it.[10] Thomas Devlin, a former employee of Mr. T’s rental, recognized the potential of renting name-brand products and partnered with W. Frank Barton and founded the Rent-A-Center brand in Wichita, Kansas in 1973.[11][12]

Delivery truck
Truck delivering Rent-A-Center items

Mark Speese joined Rent-A-Center in 1979. In 1986, Mr. Speese and a colleague left Rent-A-Center and started a competing business known as Vista Rent-To-Own.[13][14] Ernest Talley then joined Vista Rent-To-Own as Chairman of the Board of Directors in 1989 and remained Chairman through Vista’s transition to Rent-A-Center.[14] In 2001, Talley retired and Speese was appointed as Rent-A-Center’s Chairman and CEO.[15] Vista Rent-To-Own changed its name to Renters Choice, Inc. in December 1993, in connection with the acquisition from DEF Investments, Inc. and certain related entities of an 84 store rent-to-own chain operating in 12 states.[16] Mark Speese retired as Rent-A-Center CEO at the end of January 2014. He continues to hold his position as Chairman of the Board, and Rent-A-Center CFO Robert Davis now serves as CEO.[17] Michael S. Wilding, Rent-A-Center’s current Senior Vice President – Accounting and Global Controller, will serve as Interim Chief Financial Officer, effective February 1, 2014.

Renters Choice went public on the NASDAQ stock exchange in 1995 under the symbol “RCII.”[18][19] In August 1998, Renters Choice acquired Thorn Americas, Inc., which operated 1,474 stores in 49 states and the District of Columbia under the name “Rent-A-Center.” On 31 December 1998, Renters Choice changed its name to Rent-A-Center, Inc. and began operating all of its stores under the “Rent-A-Center” brand name.[20]

In February 2003, Rent-A-Center acquired 295 stores from Rent-Way, Inc.[21] In March 2004, Rent-A-Center commenced operating in Canada with the acquisition of five stores located in Edmonton and Calgary, Alberta.[22] Later that year in May 2004, Rent-A-Center completed the acquisitions of Rainbow Rentals, Inc. and Rent Rite, Inc.[23] Rent-A-Center completed its acquisition of competitor Rent-Way, Inc. on 15 November 2006, for a price of approximately $600.3 million. At the time of the acquisition, Rent-Way was ranked number three in the rent-to-own industry with 782 stores in 34 states.[24] The Rent-Way store acquisition program brought the store total to 3,535 stores. Given that the acquisition resulted in over-penetration in some markets, Rent-A-Center carried out the closing or merging of 282 stores between 2007 and 2009. [25] With 36 locations currently (2012), Rent-A-Center is continuing its expansion in Mexico.

Business operations[edit]

Rent-A-Center headquarters building, Plano, Texas.
Rent-A-Center headquarters building, Plano, Texas.

RAC provides new and used brand-named furniture, appliances, computers and electronics from brands [1], such as Ashley Furniture, Sony, Toshiba, Whirlpool Corporation, Dell and HP.[4] As part of their rent-to-own business model, Rent-A-Center generally makes its items available with no down payments or long term obligations. Customers can return an item at any time, for any reason, without penalty and also have the option to re-rent the same item and pick up the payments where they left off. Delivery, pick-up, service and repair are also included in the stated rental price. Customers can also upgrade items while they are renting—the payments will change accordingly.

In March 2007, the corporate office moved to a new location at 5501 Headquarters Drive, Plano, Texas, in the Legacy Business Park. Construction began on the 175,000-square-foot (16,300 m2) building in January 2006. Employees moved into the building on 16 March 2007. The current headquarters measures three stories and includes structured parking for 400 vehicles, a fitness center, and lunchroom.[26]

Charitable activities[edit]

Beginning in 2003, the company has made donations to the Big Brothers Big Sisters of America, collected by means of fund raisers held on an annual basis in Rent-A-Center stores, combined with a match from the company up to $100,000. Between 2005 and 2010, Rent-A-Center donated and set up 116 “RAC Rooms” at Boys and Girls Clubs of America locations, in which each club selects $5,000 worth of new furniture, electronics and computers for their room.[12] Rent-A-Center also contributed to Boys and Girls Clubs of America with four tech centers in 2012. Rent-A-Center has annually allocated $60,000 worth of scholarships to customers and the children of customers and coworkers. Through the Random Acts of Caring initiative, which was launched in 2008, RAC has donated merchandise and funding to charitable organizations located in communities where Rent-A-Center maintains retail locations.[27] 83 Random Acts of Caring have taken place since 2008, totaling $415,000 in contributions. Since 2007, the company has contributed over $600,000 in grants provided and, in addition, Rent-A-Center employees volunteer semi-annually to teach financial literacy. Rent-A-Center has provided monetary and product contributions totaling nearly $500,000 to date to the North Texas Food Bank.[28][29] Rent-A-Center’s “Soup to Nuts” initiative has involved its approximately 3,800 stores acting as collection points for cans of soup, jars of peanut butter and other canned goods which have been subsequently donated to food pantries in the U.S.[30] An initiative begun in 2010 is Rent-A-Center’s "Operation: Just Like Home," in which merchandise with a wholesale value of $175,000 is delivered to 10 Army garrisons. Contributions have been allocated to Family & Morale Welfare and Recreation operations that provide community and family services, such as the Soldier and Family Assistance Centers that in turn serve wounded, ill and injured soldiers and their families.[31]

Reception and litigation[edit]

A number of consumer protection concerns have been raised about the rent-to-own industry, including accusations of predatory lending.[32] Consumer advocates believe that rent-to-own transactions such as those offered by Rent-A-Center should be treated as credit sales, and point out that the price of a product can be two or three times the retail price. However, some[who?] are quick to note that 73% of those who use rent-to-own services have a high school diploma or higher and all prices are shown on the customer contract. In an April 2000, Federal Trade Commission study on the industry, 75% of respondents stated that they were satisfied with their rent-to-own experience. The rent-to-own industry also received an “A” or excellent regarding customer service in a 2009 study conducted by America’s Research Group.[33][34]

In 2000, Rent-A-Center was sued for sexual bias in the hiring of women. The 2002 settlement agreement resulted in a $47 million cash payment by Rent-A-Center and mandated that Rent-A-Center offer 10% of future vacancies over the following 15-month period to women who were found to be past victims of discrimination. The settlement also led Rent-A-Center to seek qualified women to serve on its Board of Directors, develop equal employment training programs, and hire a new human resources vice president to implement hiring policies that ensured equal employment opportunity for female job applicants and current employees.[35][36]

In 2006, Rent-A-Center settled for $7 million in restitution and $750,000 in civil penalties for deceptive business practices in California. The State of California claimed RAC, in violation of state law, engaged in unfair competition and illegally misrepresented the price of certain merchandise. As a result of the settlement, RAC also deposited more than $7 million into a special consumer protection fund that is used to enforce consumer protection laws.[37]

In 2010, seven months after the Washington Attorney General’s Office sued Rent-a-Center and accused the national lease-to-own chain of unfair and deceptive collection practices under Washington’s Consumer Protection Act, Rent-A-Center agreed to settle.[38]

Another prominent case in 2010 included Rent-A-Center vs. Jackson which arose out of an employment discrimination claim brought on by former RAC employee Antonio Jackson. The case went all the way to the Supreme Court, which sided with RAC in a 5-4 decision. The court held that if a company's arbitration agreement includes a clause delegating fairness challenges to the arbitrator, a court must enforce that agreement and send the matter to arbitration. When Jackson first sued, Rent-A-Center cited its arbitration agreement and claimed that any challenges to the agreement had to be decided by the arbitrator.[39]

Other names[edit]

The Rent-A-Center company converted its Wisconsin stores to Get-It-Now! credit sale outlets after a judicial decision held that the state’s consumer protection laws defining credit sales included rent-to-own businesses.[40][41] Rent-A-Center is also known as Acceptance Now [2] within its partner stores in the US in which it has kiosks, and by Rent-A-Center Corporate Leasing[3] in the US corporate world. Rent-A-Center also goes by Home Choice in Minnesota [4], by Rent-A-Centre in Canada [5] and by Rent-A-Center in Mexico [6].

See also[edit]


References[edit]

  1. ^ "Rent-A-Center Executive Officers". Retrieved 15 September 2010. 
  2. ^ "Rent-A-Center Profit". Retrieved 25 April 2012. 
  3. ^ a b "Rent-A-Center Employees". Retrieved 25 April 2012. 
  4. ^ a b c d "Rent-A-Center Profile". Reuters. 10 August 2010. Retrieved 10 August 2010. 
  5. ^ "Company Overview". 10 August 2010. Retrieved 10 August 2010. 
  6. ^ "Retail". CONSUMER ELECTRONICS DAILY. July 2010. 
  7. ^ "BUYINS.NET: XOM, GCI, HOLX, EXXI, RCII, PCBC Expected To Be Lower After Earnings Releases on Monday" (Press release). M2 PressWIRE. 29 January 2010. 
  8. ^ jobhunt.org http://www.job-hunt.org/employers/Fortune-500/by-state/tx.shtml |url= missing title (help). Retrieved 25 April 2012. 
  9. ^ "Competitors". 10 August 2010. Retrieved 10 August 2010. 
  10. ^ Rivlin, Gary (2010). Broke, USA: From Pawnshops to Poverty, Inc. - How the Working Poor Became Big Business. New York, NY: HarperCollins. p. 26. ISBN 0-06-173321-0. 
  11. ^ "The Barton Legacy". 10 August 2010. Retrieved 7 August 2007. 
  12. ^ a b Dan Voorhis (11 September 2003). "Rent-A-Center Founder Honored at Wichita, Kan., State University". The Wichita Eagle. 
  13. ^ "Rent-to-Own News - Speese Honored for Lifetime of Entrepreneurship" (Press release). Targeted News Service. 10 November 2009. 
  14. ^ a b "SEC Info". Retrieved 15 September 2010. 
  15. ^ "RENT-A-CENTER GIVES PROFITS WARNING". The Wichita Eagle. 10 October 2001. 
  16. ^ "1997 10-K". 19 March 1998. Retrieved 15 September 2010. 
  17. ^ Rent-A-Center co-founder Speese retires
  18. ^ Michael Saul (31 March 1995). "10 Texas firms make Fortune's fast-growth list". The Dallas Morning News. 
  19. ^ "Equity". Investment Dealers' Digest: 28. January 1995. 
  20. ^ "1998 10-K". 25 March 1999. Retrieved 15 September 2010. 
  21. ^ "2003 10-Q". 5 November 2003. Retrieved 15 September 2010. 
  22. ^ "2003 10-K". 11 March 2004. Retrieved 15 September 2010. 
  23. ^ "2004 10-Q". 30 July 2004. Retrieved 15 September 2010. 
  24. ^ "Rent-A-Center completes Rent-Way purchase". Dallas Business Journal. 15 November 2006. 
  25. ^ "Rent-A-Center Acquires Rent Way For $567 Million". RTO Online. 6 August 2006. Retrieved 15 September 2010. 
  26. ^ "Headquarters Completed in Plano". Texas Construction 15: 11. July 2007. 
  27. ^ "Rent-A-Center Furnishes Homes for New Orleans ‘Katrina’ Families" (Press release). Targeted News Service. 9 December 2009. 
  28. ^ "Giving Briefs". The Roanoke Times. 19 April 2010. 
  29. ^ Steve Quinn (22 November 2003). "The Dallas Morning News Collin County Business Column". The Dallas Morning News. 
  30. ^ "Rent-A-Center Donates $250,000 Through National Hunger Relief Program" (Press release). Business Wire. 31 August 2010. 
  31. ^ "Rent-A-Center Donates Merchandise to Fort Benning" (Press release). Targeted News Service. 27 April 2010. 
  32. ^ "Predatory Lending: Rent-to-Own". Retrieved 15 September 2010. 
  33. ^ "Survey of Rent-to-Own Customers -Executive Summary". 25 June 2007. Retrieved 15 September 2010. 
  34. ^ "Rent to Own’s Customer Satisfaction Rate Answers Critics" (Press release). Market Wire. 29 September 2009. Retrieved 10 August 2010. 
  35. ^ "EEOC Announces $47 Million Agreement in Principle to Settle Claims of Class-Wide Sex Bias Against Rent-A-Center". The U.S. Equal Employment Opportunity Commission. Retrieved 4 January 2007. 
  36. ^ secure.rentacenter.com/rentwaydemotions.html
  37. ^ "Rent-A-Center Deceived Thousands of Californians in Marketing Services, Memberships". California Office of the Attorney General. 17 November 2006. 
  38. ^ "Rent-a-Center settles harassment and contract claims". Washington State Office of the Attorney General. 1 March 2010. 
  39. ^ "U.S. Supreme Court Shuts Courthouse Door to Consumers, Employees Challenging Unfair Arbitration Clauses" (Press release). Targeted News Service. 21 June 2010. 
  40. ^ Steven Walters (8 March 2004). "Doyle defends OK on rent bill". Milwaukee Journal Sentinel. 
  41. ^ Tom Held (13 November 2002). "Rent-A-Center settles lawsuit filed by state". Milwaukee Journal Sentinel.