Rent-A-Center pulling AcceptanceNow kiosks from Conn’s
The quality and performance of “ANow” customer accounts originating from Conn’s stores have “consistently underperformed compared to the rest of its ANow portfolio in terms of delinquencies, losses and product returns,” Rent-A-Center said, explaining the reason for terminating the referral agreement with The Woodlands, Texas-based, electronics, appliance and home furnishings retailer.
“These accounts were cash flow negative and produced higher-than-average volume of returns, which were generally absorbed by Rent-A-Center’s core stores located in those associated areas, additionally resulting in an adverse impact of inventory levels in these core stores,” Rent-A-Center said.
It noted the Conn’s credit policies through its company-owned secondary financing operation “is unique” compared to its other retail partners and impacted the underperformance.
“We expect these closures will result in an immediate improvement in cash flow in the ANow business beginning in June and an improvement in ANow’s return on investment for the remainder of 2017,” Rent-A-Center interim CEO Mark Speese said in a release. “We thank Conns for their partnership and wish them well in the future.”
The ANow kiosks Conn’s stores will cease operations June 6. Existing accounts under the Conns agreement will be merged into and managed by existing ANow or core U.S. locations.
Speese noted the company recently announced strategic initiatives it was taking to reposition the company for long-term growth and profitability and said the termination decision “advances our goal,” as renewing was not in the best interest of the company and our shareholder.
But the company added that it remains focused on growing ANow and doesn’t expect to terminate any of its other retail partnerships.
“We remain focused on achieving our mission to improve our customers’ quality of life by providing the opportunity to obtain ownership of merchandise at the retail stores they want to shop in,” said Steve McKinley, vice president sales, client relations for AcceptanceNow.
“ANow is dedicated to providing a great customer experience with our retail partners through our staffed kiosk option which delivers five to 10 times the volume of approvals than any other model in this space. We remain committed to working with our current and future partners where the ANow RTO alternative provides a win for the customers, our partners and for the company.”
A Conn’s spokesperson told Furniture Today it was declining comment until after it releases fiscal fourth quarter earning April 4.