FINANCE

Rent-A-Center to be acquired for $1.37 billion

BY Marianne Wilson

Rent-A-Center is going private.

The rent-to-own retailer on Monday said it has entered into an agreement to be acquired by an affiliate of buyout firm Vintage Capital Management in a deal valued at $1.37 billion, including debt. Vintage will buy the company for $15 per Rent-A-Center share, which is $1 per share above its previous offer price and represents a premium of 25% to the stock’s closing price on Friday.

Vintage Capital is the controlling shareholder of Buddy’s Home Furnishings, a Florida-based rival of Rent-A-Center, which operates 330 stores, mostly in the South. The company has been pursuing Rent-A-Center since last fall, when it offered to buy the company for $13 a share. Last week, Vintage upped its offer to $14 a share

“Vintage is a natural partner for Rent-A-Center given its deep knowledge of the rent-to-own industry, and we look forward to partnering with them to realize the full benefits of the transaction.” said Mitch Fadel, CEO of Rent-A-Center.

Rent-A-Center owns approximately 2,400 stores in the United States, Mexico, Canada and Puerto Rico, and approximately 1,250 Acceptance Now kiosk locations in the United States and Puerto Rico. Rent-A-Center Franchising International, a wholly owned subsidiary of the company, is a national franchiser of approximately 250 rent-to-own stores operating under the trade names of “Rent-A-Center,” “ColorTyme,” and “RimTyme.”

“We believe that the combination of Rent-A-Center, Buddy’s and Vintage is a compelling opportunity to utilize our resources and expertise to enhance value and create a leader in the rent-to-own industry,” said Brian R. Kahn, managing member and founder of Vintage Capital and chairman of Buddy’s Newco (Buddy’s Home Furnishing).

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

What impact do you expect the new tariffs on imports will have on the economy?
FINANCE

RILA, NRF: Increased costs due to tariffs will destroy gains from tax reform

BY Marianne Wilson

The nation’s leading retail associations were quick to respond to the Trump administration’s announcement on Friday that it plan to move forward and impose a 25% tariff on up to $50 billion of imported Chinese goods.

The Retail Industry Leaders Association and the National Retail Federation both say that the new tariffs would put the nation’s economic progress at risk. RILA stated that U.S. consumers and farmers will be the ones hurt most by the tariffs, not China.

“Tariffs don’t punish China, they raise the cost for consumers,” said Hun Quach, VP of international trade for RILA. “For many American families, these increased costs will wipe out any gains from tax reform.”

Quach called the new tariffs “a reckless escalation of the global trade war that will do little to address the underlying problems with China”

“With Canada, Mexico, the EU and China all promising retaliatory measures at the same time, America’s retailers, farmers, autoworkers and American employees throughout the global value chain are at risk,” she said.

The National Retail Federation also denounced the new tariff plan.

“Tariffs are taxes on American consumers, plain and simple,” said president and CEO Matthew Shay. “These tariffs won’t reduce or eliminate China’s abusive trade practices, but they will strain the budgets of working families by raising consumer prices.”

Shay recently appeared on CNBC’s “Squawk Box,” where he discussed how tariffs would erase the benefits of tax reform, destroy U.S. jobs and increase consumer prices.

A study commissioned by NRF and the Consumer Technology Association found that tariffs on $50 billion of Chinese imports, coupled with the impact of retaliation, would lead to four job losses for every job gained and reduce U.S. gross domestic product by nearly $3 billion.

Both RILA and the NRF called on the White House to change course and reconsider the tariffs.

“We urge the Administration to reconsider these actions before an outbreak of tariffs from all directions threatens the economic growth and prosperity we currently enjoy,” said RILA’s Quach. “In a trade war, there are no winners, only losers.”

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

What impact do you expect the new tariffs on imports will have on the economy?
FINANCE

May retail sales jump

BY Marianne Wilson

Consumers were in a spending mood in May as sales rose more than expected amid a robust labor market.

Retail sales increased 0.7% seasonally adjusted over April and 5.6% unadjusted year-over-year, according to the National Retail Federation. The NRF numbers exclude automobiles, gasoline stations and restaurants.

Overall May sales – including automobiles, gasoline and restaurants – were up 0.8% over April. It was the biggest jump since November 2017 and double what economists had expected. Sales rose 5.9% year-over-year.

“We have seen ongoing momentum over the last several months and believe sales growth should remain healthy and consistent with our 2018 outlook,” said NRF chief economist Jack Kleinhenz.

On a less positive note, Kleinhenz said that inflation and rising oil prices are complicating the picture.

“And new tariffs or a trade war would certainly be negatives that would increase prices and reduce both consumer purchasing power and consumer confidence,” he stated.

The May results build on improvement seen in April, which was up 0.5% monthly and 2.8% year over year.

Specifics from key retail sectors during May include:

• Online and other non-store sales were up 9.1% year-over-year and up 0.1% over April seasonally adjusted.

• Clothing and clothing accessory stores were up 8.2% year-over-year and up 1.3% from April seasonally adjusted.

• General merchandise stores were up 5.6% year-over-year and up 1.2% from April seasonally adjusted.

• Building materials and garden supply stores were up 5.3% year-over-year and up 2.4% from April seasonally adjusted.

• Grocery and beverage stores were up 4.4% year-over-year and unchanged from April.

• Furniture and home furnishings stores were up 4.2% year-over-year but down 2.4% from April seasonally adjusted.

• Electronics and appliance stores were up 2.8% year-over-year and up 0.2% from April seasonally adjusted.

• Health and personal care stores were up 2.6% year-over-year and up 0.5% from April seasonally adjusted.

• Sporting goods stores were down 0.5% year-over-year and down 1.1% from April seasonally adjusted.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

What impact do you expect the new tariffs on imports will have on the economy?