Rent-A-Center, Inc.
TypePublic
Nasdaq: UPBD
S&P 600 component
IndustryHome furnishings
Rent-to-own
Founded1973 (1973)
1986 (1986) (incorporated)
Wichita, Kansas, U.S.
Headquarters
Plano, Texas
,
U.S.
Key people
Mitchell Fadel Chief Executive Officer (CEO)
Fahmi Karam Chief Financial Officer (CFO)
Ann Davids Chief Marketing Officer, Chief Customer Officer (CMO, CCO)
Sudeep Gautam Chief Technical & Digital Officer (CTO, CDO)
[1]
ProductsProvides furniture, electronics, computers and household appliances available under rent-to-own agreements
RevenueIncreaseUS$2.6 billion (2019)[2]
IncreaseUS$193 million (2019)[2]
IncreaseUS$125 million (2019)[2]
Total assetsIncreaseUS$1.58 billion (2019)[2]
Total equityIncreaseUS$459 million (2019)[2]
Number of employees
14,500 (2020)
SubsidiariesRent-A-Center Franchising International
Websitewww.rentacenter.com

Rent-A-Center (commonly referred to as RAC) is an American public furniture and electronics rent-to-own company based in Plano, Texas.[3] The company was incorporated in 1986 and as of 2014 operates approximately 2,972 company-owned stores in the United States, Puerto Rico and Mexico, accounting for approximately 35% of the rent-to-own market in the United States based on store count.[4][3]

Rent-A-Center's operations include 24 retail installment stores called Get It Now (based in Wisconsin);[5] 17 Home Choice stores in Minnesota; and approximately 1,359 Acceptance Now kiosks housed within retail partner stores throughout the United States.[6] Its subsidiary, Rent-A-Center Franchising International Inc. (RACFI), formerly known as ColorTyme Inc., is America's first franchisor of independently owned-and-operated rent-to-own stores. Its franchisees operate 162 rent-to-own stores in 31 states under the Rent-A-Center and ColorTyme brand names, and the company's wheels-and-tires franchise brand, RimTyme, operates 31 stores in 13 states.[3][7][8]

In 2014, Fortune Magazine listed Rent-A-Center at number 711 on the Fortune 1000 list of the largest U.S. corporations, based on revenues alone.[9]

On February 22, 2023, the company changed its corporate name from Rent-A-Center, Inc. to Upbound Group, Inc. The new stock market ticker is UPBD.

History

The rent-to-own business was started by Ernie 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 1987, Thorn EMI acquired Rent-A-Center for $594 million.[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]

Renters Choice went public on the NASDAQ stock exchange in 1995 under the symbol "RCII".[17][18] 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.[19]

In 2001, Talley retired and Speese was appointed as Rent-A-Center's Chairman and CEO.[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] 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 123 Mexico stores as of December 2019, Rent-A-Center is continuing its expansion in Mexico.[6]

Launched in 2006, under the brand name RAC Acceptance, Rent-A-Center, Inc. operates lease-to-own kiosks within third-party retail locations across the country. The kiosks transitioned to the AcceptanceNOW brand in January 2014.[26]

Mark Speese retired as Rent-A-Center CEO at the end of January 2014. Rent-A-Center CFO Robert Davis served as CEO from January 2014 to January 2017, when Mark Speese returned as interim CEO.[27]

In January 2018, Mark Speese stepped down as CEO and was succeeded by former president Mitchell Fadel.[28]

In August 2019, Rent-A-Center completed the acquisition of Merchants Preferred,[29] a nationwide provider of virtual lease-to-own services. After acquiring Merchants Preferred, Rent-A-Center unveiled its integrated retail partner offering, Preferred Lease. Preferred Lease is the combined business model of AcceptanceNOW's staffed lease-to-own business with Merchants Preferred's virtual lease-to-own business.[30]

Business operations

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, such as Ashley Furniture, Sony, Whirlpool Corporation, Dell and HP.[3] As part of their rent-to-own business model, Rent-A-Center generally makes its items available with small initial payments and no 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, game room and lunchroom.[31] In January 2020, Cawley Partners announced the acquisition of the Rent-A-Center corporate office, leasing back 60 percent of the building to Rent-A-Center.[32]

In July 2015, Rent A Center sold several Ontario Locations to EasyHome for $3.4 million. With this agreement, Rent A Center & EasyHome signed a 3-year agreement to a non-compete contract that each company cannot open any stores in each other's countries.[33]

Philanthropy

Rent-A-Center supports charities that provide family and youth empowerment opportunities. Beginning in 2003, the company made donations to Big Brothers Big Sisters of America locations, collected by means of fundraisers held on an annual basis in Rent-A-Center stores. 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.[34] Rent-A-Center also contributed to Boys and Girls Clubs of America with four tech centers in 2014.[35] Rent-A-Center has annually allocated $60,000 worth of scholarships to customers and the children of customers and coworkers. Since 2004, Rent-A-Center has awarded more than $850,000 in scholarships to college students. 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.[36] Ninety-eight Random Acts of Caring have taken place since 2008, totaling $531,300 in contributions. Since 2007, the company has contributed over $600,000 in grants to Junior Achievement and, in addition, Rent-A-Center employees volunteer annually to teach financial literacy to students in Dallas-area schools.

Since 2003, Rent-A-Center has provided monetary and product contributions totaling nearly $1.2 million to date to the North Texas Food Bank.[37][38][39] Employees in the Field Support Center have also volunteered over 1,000 hours to Dallas-area food banks during the annual North Texas Food Bank campaign. Rent-A-Center has also donated more than $1.25 million to 11 other food banks across the country since 2009. This is in addition to the grassroots hunger-relief campaign staged across Rent-A-Center's 3,000-plus U.S. stores throughout the month of September. Originally dubbed "Soup to Nuts", now "Fill the Fridge", this effort supports Hunger Action Month. This virtual food drive leverages Rent-A-Center's stores as collection points for cash donations. The donated funds are distributed to food banks across the U.S. and Puerto Rico at the conclusion of the month-long campaign.[40]

Reception and litigation

A store in Hillsboro, Oregon
A store in Fort Walton Beach, Florida

A number of consumer protection concerns have been raised about the rent-to-own industry, including accusations of predatory lending.[41] 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 final price of a product can be two or three times the retail price. 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, whereas 19% were dissatisfied.[42]

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.[43]

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.[44]

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.[45]

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.[46]

In 2020, Rent-A-Center settled a California class action suit for $13 million, with the suit involving a group of customers challenging improper add-on freight charges.[47]

Other names

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.[48][49] Rent-A-Center is also known as Acceptance Now or Preferred Lease[50] within its partner stores in the US in which it has kiosks.

In Mexico, the company is simply known as RAC (sounded out like the word "rack"), and the company operates as Home Choice in Minnesota, also due to similar rent-to-own laws from those in Wisconsin.

See also

References

  1. ↑ "Rent-A-Center Executive Officers". Retrieved 15 September 2010.
  2. 1 2 3 4 5 "Rent-A-Center, Inc. (RCII)". Yahoo Finance.
  3. 1 2 3 4 "Rent-A-Center Profile". Reuters. 10 August 2010. Archived from the original on 4 May 2009. Retrieved 10 August 2010.
  4. ↑ "Rent-A-Center Employees". Archived from the original on 5 October 2007. Retrieved 15 September 2010.
  5. ↑ "About Get It Now". Archived from the original on 15 August 2013. Retrieved 24 October 2014.
  6. 1 2 "Acceptance Now Kiosks" (Press release). Retrieved 24 October 2014.
  7. ↑ "Company Overview". 10 August 2010. Archived from the original on 24 January 2010. Retrieved 10 August 2010.
  8. ↑ "BUYINS.NET: XOM, GCI, HOLX, EXXI, RCII, PCBC Expected To Be Lower After Earnings Releases on Monday" (Press release). M2 PressWIRE. 29 January 2010.
  9. ↑ Caitlin Dempsay (14 August 2014). "Fortune 1000 Companies List for 2014". GeoLounge. Retrieved 24 October 2014.
  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 978-0-06-173321-5.
  11. ↑ "The Barton Legacy". 10 August 2010. Retrieved 7 August 2007.
  12. ↑ 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. 1 2 "SEC Info". Archived from the original on 2 February 2013. Retrieved 15 September 2010.
  15. ↑ "THORN EMI MOVES IN ON US RETAIL MARKET WITH $600m TENDER FOR RENT-A-CENTER". Tech Monitor. 29 July 1987. Retrieved 18 December 2022.
  16. ↑ "1997 10-K". 19 March 1998. Retrieved 15 September 2010.
  17. ↑ Michael Saul (31 March 1995). "10 Texas firms make Fortune's fast-growth list". The Dallas Morning News.
  18. ↑ "Equity". Investment Dealers' Digest: 28. January 1995.
  19. ↑ "1998 10-K". 25 March 1999. Retrieved 15 September 2010.
  20. ↑ "RENT-A-CENTER GIVES PROFITS WARNING". The Wichita Eagle. 10 October 2001.
  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. Archived from the original on 18 December 2010. Retrieved 15 September 2010.
  26. ↑ "Rent-A-Center to Rebrand Its Growing Kiosk Business | Rent-A-Center". investor.rentacenter.com.
  27. ↑ "Rent-A-Center, Inc. Announces Management Transition". www.businesswire.com. 10 January 2017.
  28. ↑ CNBC (2 January 2018). "Rent-A-Center CEO Mark Speese steps down". CNBC. Retrieved 2 January 2018.
  29. ↑ "Rent-A-Center Completes Acquisition of Merchants Preferred | Rent-A-Center". investor.rentacenter.com.
  30. ↑ "Rent-A-Center Announces New Preferred Lease Broader Service Offering | Rent-A-Center". investor.rentacenter.com.
  31. ↑ "Headquarters Completed in Plano". Texas Construction. 15: 11. July 2007.
  32. ↑ LLC, Fill in the Blank (6 January 2020). "Cawley Partners Announces Acquisition of Rent-A-Center Corporate Office 5501 Headquarters". Cawley Partners.
  33. ↑ "EasyHome Acquires 14 Rent A Centre locations". Marketwire L.P. Archived from the original on 17 January 2016. Retrieved 12 August 2015.
  34. ↑ "New "RAC Room" Will Provide Postive [sic] Place For Teens" (Press release). Archived from the original on 28 October 2014. Retrieved 28 October 2014.
  35. ↑ "Rent-A-Center Donates to Boys & Girls Clubs of Hawaii". Rentacenter.com (Press release). Retrieved 24 May 2016.
  36. ↑ Wegman, Laurie (18 August 2015). "102 and Counting: RAC's Random Acts of Caring". Rent-A-Center Blog.
  37. ↑ "Giving Briefs". The Roanoke Times. 19 April 2010.
  38. ↑ Steve Quinn (22 November 2003). "The Dallas Morning News Collin County Business Column". The Dallas Morning News.
  39. ↑ "Rent-A-Center and North Texas Food Bank Team Up to Fight Hunger". Rentacenter.com (Press release). Retrieved 24 May 2016.
  40. ↑ "Rent-A-Center Donates $250,000 Through National Hunger Relief Program" (Press release). Business Wire. 31 August 2010.
  41. ↑ "U.S. PIRG". Archived from the original on 26 August 2004. Retrieved 15 September 2010.
  42. ↑ "Federal Trade Commission". 25 June 2007. Retrieved 15 September 2010.
  43. ↑ "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. Archived from the original on 20 March 2002. Retrieved 4 January 2007.
  44. ↑ "Rent-A-Center Deceived Thousands of Californians in Marketing Services, Memberships". California Office of the Attorney General. 17 November 2006. Archived from the original on 14 July 2007.
  45. ↑ "Rent-a-Center settles harassment and contract claims". Washington State Office of the Attorney General. 1 March 2010.
  46. ↑ "U.S. Supreme Court Shuts Courthouse Door to Consumers, Employees Challenging Unfair Arbitration Clauses" (Press release). Targeted News Service. 21 June 2010.
  47. ↑ Hayes, Peter (27 January 2020). "Rent-A-Center Settles Overcharging Claims for $13 Million". Bloomberg News. Retrieved 26 November 2020.
  48. ↑ Steven Walters (8 March 2004). "Doyle defends OK on rent bill". Milwaukee Journal Sentinel.
  49. ↑ Tom Held (13 November 2002). "Rent-A-Center settles lawsuit filed by state". Milwaukee Journal Sentinel.
  50. ↑ "Rent-A-Center Announces New Preferred Lease Broader Service Offering". www.businesswire.com. 22 January 2020.
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