Plus   Neg

Rent-A-Center To Layoff 250 Employees, Reviewing Alternatives

Rent-A-Center, Inc. (RCII) Wednesday said it will cut 25% of its corporate office workforce in Plano, Texas, as the household goods leasing company implements costs cutting initiatives to improve growth and profitability.

Rent-A-Center is reducing its headcount by about 250 positions, effective today. Rent-A-Center expects this decision 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 about $28 million in annual run-rate cost savings with about $20 million realized in 2018. The company expects to incur employee severance charges and other one-time costs relating to these workforce reductions of around $3 million in the first quarter.

The headcount reduction follows the recent elimination of Rent-A-Center's Chief Operating Officer Joel Mussat. The elimination of that position is intended to bring the overall operations of the company under the direct control of CEO Mitch Fadel.

"As we outlined just two weeks ago, Rent-A-Center is implementing initiatives to reduce costs and improve performance. While major reductions in work force are difficult, we are confident that Rent-A-Center will be better positioned for long-term growth and profitability," said Mitch Fadel, Chief Executive Officer of Rent-A-Center. "Additionally, we remain focused on delivering a more targeted value proposition and look forward to building on our momentum from our January and February performance."

The company also reconfirmed that its Board is continuing its review of strategic and financial alternatives to maximize stockholder value, including evaluating a sale. Rent-A-Center has received proposals from bidders interested in acquiring and the Board and its advisors remain actively engaged with these parties.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Galaxy Entertainment Group (WYNN) Friday announced that it has agreed to purchase 5.3 million primary shares of Wynn Resorts Ltd. at a price of $175 a share, resulting in $927.50 million of gross proceeds to Wynn Resorts. The two sale, combined with a previous sale effectively eliminate ownership of founder and former CEO Steve Wynn in Wynn Resorts. Starbucks wants to be more efficient but it is risking the fragile loyalty of its most devoted customers. The ubiquitous chain plans a major push to get coffee lovers to use its mobile app to place their orders, but regulars prefer to buy their lattes by waiting in the queue. According to reports,... Taco Bell, the Mexican fast-food chain owned by Yum Brands Inc. (YUM), Thursday said it will start selling tortilla chips in grocery and convenience stores starting May. The chips will be available in Fire and Mild sauce packet flavors and also in a Classic flavor. "This launch of our first line...
comments powered by Disqus
Follow RTT