Rent-A-Center Inc. (RCII - Analyst Report), in an attempt to expand its operational roots, is all set to serve the residents of Petoskey, Michigan and Depew, New York by opening new stores and providing them additional avenues to own luxury furnishings, electrical devices, electronics and computers.
The new 3,400-square-foot showroom in Petoskey and the 4,207-square-foot showroom in Depew will offer brands like HP, Ashley, Sony, Serta and Whirlpool. Rent-A-Center operates through 106 and 176 locations in Michiganand New York, respectively.
The residents of these mentioned places will get the benefit of acquiring goods with flexible payment options allowing them to pay weekly, biweekly or monthly. Further, the company provides a lifetime recall service, which facilitates its customers to re-rent the same or a comparable item and get payments.
Rent-A-Center is one of the largest rent-to-own operators in the U.S. and leverages an extensive network of more than 3,000 stores to effectively penetrate into its target markets, and gain a competitive advantage over its competitors Aaron’s Inc. (AAN - Snapshot Report) and Advance America.
The company is taking prudent steps to optimize rental merchandise levels in accordance with the sales trends. Rent-A-Center implemented a centralized inventory management system, including automated merchandise replenishment. Moreover, a new centralized purchasing system allows it to better manage the rental merchandise.
Moreover, due to the continued tightening of the credit market, customers witness 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 the new rental purchase deals.
Currently, we have a long-term Neutral rating on the stock. However, Rent-A-Center’s shares maintain a Zacks #4 Rank, which translates into a short-term Sell recommendation.