Rent-A-Center, Inc. Announces Store Closings

Furniture World News

Rent-A-Center, Inc., the nation’s largest rent-to-own operator, announced plans to close approximately 280 stores across the U.S. “We continually analyze every aspect of our business in an effort to improve operating and financial performance,” commented Mark E. Speese, the Chairman and Chief Executive Officer of Rent-A-Center, Inc. “Accordingly, we evaluated every market in which we operate based on operating results, competitive positioning, and growth potential. As a result, we identified approximately 280 stores that we intend to close and merge with existing Rent-A-Center stores within the next 90 days,” Speese stated. The Company expects to incur pre-tax restructuring charges related to the store consolidation plan and other restructuring items in the range of $36.0 million to $43.0 million, substantially all of which will be recorded in the fourth quarter of our fiscal year ending December 31, 2007. The estimated cost with respect to this restructuring relates primarily to lease terminations, fixed asset disposals and other miscellaneous items. The Company expects the cash outlay associated with this restructuring will be in the range of $26.0 million to $30.5 million over the next 12 to 18 months. The 280 stores identified generated revenues of approximately $140.0 million year-to-date through October 31, 2007. These stores will transfer their customer rental purchase agreements to existing Rent-A-Center stores and the Company expects to retain the majority of these rental purchase agreements. At the conclusion of the restructuring, the Company expects a pre-tax monthly operating income benefit in the range of $2.0 million to $2.5 million. Rent-A-Center, Inc., headquartered in Plano, Texas, currently operates approximately 3,355 company-owned stores nationwide and in Canada and Puerto Rico. The stores generally offer high-quality, durable goods such as major consumer electronics, appliances, computers and furniture and accessories under flexible rental purchase agreements that generally allow the customer to obtain ownership of the merchandise at the conclusion of an agreed upon rental period. ColorTyme, Inc., a wholly owned subsidiary of the Company, is a national franchiser of approximately 210 rent-to-own stores operating under the trade name of "ColorTyme."