Rent-A-Center Halts Financial Services Growth

PLANO, TX-Rent-A-Center will cease opening any new in-store financial service locations until its existing sites are profitable, executives said at the company’s third-quarter conference call.

The units offer check-cashing, short-term loans, cash advances, money transfers, money orders and tax services. However, they have not performed up to expectations and performance actually declined in the third quarter, said Mark E. Speese, chairman and CEO.

“There is a need for this service,” Speese said. “But to grow simply for growth’s sake, without making it profitable, is not the right thing to do.” Speese gave no time frame as to when expansion will resume.

Total revenues were $708.8 million, a decrease of $0.9 million from the same period in the prior year, largely because of store closings. Comp-store sales rose 3.4%. Net earnings for the quarter were $29.4 million, up 16.2%, from the same period last year.

Rent-A-Center operates approximately 3,045 company-owned stores nationwide and in Canada and Puerto Rico. ColorTyme, Inc., a wholly owned subsidiary, is a national franchiser of approximately 225 rent-to-own stores operating as “ColorTyme.”