Rent-A-Center Expands in Illinois - Analyst Blog

By Zacks.com,  August 20, 2012, 07:34:17 PM EDT

Rent-A-Center Inc . ( RCII ), in an attempt to expand its operational roots in Illinois, opened an additional store in Downers Grove. The company, through its latest store, will offer furnishings, electrical devices, electronics and computers. With the inclusion of this new store, Rent-A-Center now operates through 106 locations in Illinois.

The residents of the region will now have an additional option of purchasing goods with flexible payment options, giving them the freedom to pay weekly, biweekly or monthly. Moreover, the company offers a lifetime recall service, which facilitates its customers to re-rent the same or a comparable item and receive payments.

Earlier this week, the company announced the opening of its new store in Mableton, Georgia. Rent-A-Center leverages an extensive network of stores to effectively penetrate into its target markets, which in turn, facilitates the company to generate healthy sales and gain a competitive advantage over its rivals, Aaron's Inc . ( AAN ) and Advance America.

Rent-A-Center offers consumer electronics, appliances and furniture products under rental-purchase schemes that allow customers to own the merchandise on the completion of the rental period. Due to the continued tightening of the credit market, customers view rent-to-own as a more flexible and viable option compared to credit.

Moreover, the company's new business model, named RAC Acceptance, is gradually gaining traction. When a retailer denies a consumer credit financing for a particular product, Rent-A-Center, under its RAC Acceptance program, acquires that product from the retailer and offers it to the consumer under a rental-purchase transaction.

Currently, we have a long-term 'Outperform' recommendation on the stock. The company alshas a Zacks #2 Rank, which translates into a short-term 'Buy' rating.


 
(AAN): ETF Research Reports
 
RENT-A-CENTER (RCII): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Business, Stocks

Referenced Stocks: AAN, RCII



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