Rent-A-Center Opens Two Stores

Zacks

Rent-A-Center Inc. (RCII) announced the opening of a new store in Taylor, Texas and another store in Vancouver, Wash. The company conducts operations through 279 locations in Texas and 45 locations in Washington.

The move reflects the company’s strategic approach of leveraging an extensive network of stores to effectively penetrate into 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 recently concluded quarter, the largest rent-to-own operator in the U.S, opened 2 new Core U.S. locations, acquired 3 stores, consolidated 14 stores with existing locations and closed 2, 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 count to 148 stores. ColorTyme, which is a wholly owned subsidiary of Rent-A-Center, added 2 new locations and closed 5 locations, with the total store count coming in at 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 new rental-purchase deals.

Currently, Rent-A-Center holds a Zacks Rank #3 (Hold). However, until any further upward revision in Rent-A-Center’s Zacks Rank, other stocks in the finance-leasing universe worth considering are MCG Capital Corporation (MCGC) and Marlin Business Services Corp. (MRLN), both of which hold a Zacks Rank #2 (Buy).

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