Rent-A-Center Inc. (RCII) announced the opening of a store in Kihei, Hawaii. The company currently operates 13 locations in Hawaii.
The move reflects the company’s strategic approach of leveraging an extensive network of stores to effectively penetrate its target markets, which in turn facilitates it to generate healthy sales and gain competitive advantage over its rivals — Aaron’s Inc. (AAN) and Advance America.
During the fiscal second-quarter 2013, the largest rent-to-own operator in the U.S, opened two stores at Core U.S. locations, acquired three stores, consolidated 14 stores with existing locations and closed two, bringing the total store count to 2,972. The company also opened 110 RAC Acceptance stores and consolidated 10 stores with existing locations, resulting in 1,153 stores.
Twenty international locations were opened during the quarter, bringing the store count to 148. ColorTyme, a wholly-owned subsidiary of Rent-A-Center, added two locations while closing five, bringing the total store count to 221.
For 2013, management plans to open approximately 60 rent-to-own locations in Mexico. Moreover, the company aims at about 365 domestic RAC Acceptance kiosk additions.
Rent-A-Center offers consumer electronics, appliances and furniture products under rental purchase schemes that allow customers to own the merchandise upon completion of the rental period. Due to continued tightening of the credit market, customers see rent-to-own as a more flexible and viable option compared to credit. However, the sluggish recovery and a fragile job market may make customers reluctant to enter into new rental-purchase deals.
Currently, Rent-A-Center holds a Zacks Rank #2 (Buy). Other stocks in the finance-leasing universe worth considering are MCG Capital Corp. (MCGC) and Marlin Business Services Corp. (MRLN). Both the stocks also carry a Zacks Rank #2.