Rent-A-Center, one of the largest rent-to-own operators in the United States, is undertaking a cost-containment and restructuring program that will see 250 employees at their Plano, Texas headquarters. It appears that the company is continuing to review strategic partnerships and possibly an outright sale to a yet to be named third-party.
According to Rent-A-Center CEO, Mitch Fadel…
Implementing Cost-Cutting Initiatives to Drive Profitability
“The Company’s strategic plan is focused on driving growth and profitability by reducing costs and enhancing the customer value proposition. Accordingly, Rent-A-Center announced it is reducing its headcount by approximately 250 positions, representing approximately 25% of its corporate office workforce in Plano, Texas."
"This initiative is intended to better align the Company’s organizational structure with its operations under its strategic plan to drive $65 million to $85 million of annualized cost savings opportunities. The headcount reduction, along with related G&A, is expected to generate approximately $28 million in annual run-rate cost savings with approximately $20 million realized in 2018. The Company expects to incur employee severance charges and other one-time costs relating to these workforce reductions of approximately $3 million in the first quarter of 2018.”
Strategic & Financial Alternatives Update
"Finally, in order to clarify incorrect information in the marketplace, the Company reconfirmed that its Board is continuing its review of strategic and financial alternatives to maximize stockholder value, including evaluating a sale of the Company. The Company has received proposals from bidders interested in acquiring the Company and the Board and its advisors remain actively engaged with these parties.
The Board currently expects to reach a determination with respect to whether to pursue a sale of the Company during the second quarter 2018 and does not intend to provide further updates on that part of its strategic review."