Rent-a-Center (RAC), despite taking $2 million charge to cover co...

6.6% gain in same-store sales. Rentals and fees rose to $456.1 million from $409 million, while merchandise sales inched up to $23.9 million from $20.1 million. Merchandise sales at Colortyme franchisees increased to $12.4 million from $11.2 million, while royalty income and fees were down slightly to $1.64 million from $1.84 million. Federal judge has given preliminary approval to settlement under which RAC will pay $47 million to more than 5,300 women and make changes in its employment policies. Settlement is expected to be finalized by year-end, capping legal battle that stemmed from suit filed by Claudine Wilfong in Aug. 2000 that applied to women employed in middle management in regional offices. It was followed by one filed by Margaret Bunch covering store managers. RAC also paid $2 million fee in quarter in connection with its paying off $128 million in debt in reducing total to $564 million. Chain also opened 16 stores in quarter, while acquiring another 38 including Conn.-based Rentown. It spent $27.2 million in first half acquiring chains and accounts, CFO Robert Davis said. In cost-saving move implemented earlier this year, 15% of chain’s 2,000 employees are covered by pay scale based on of living in 3 geographic regions with goal of hitting 40-50% by year-end, CEO Mark Speese told analysts in conference call. New pay scale, which was first implemented in Feb., is expected to eventually generate $10 million in annual savings in labor costs, company officials said. As RAC continues to expand based of more than 2,200 stores, chain sees room for 4,000 in U.S., Pres. Mitch Fadel said. Overall rent-to-own market, which encompasses 8,000 stores, could “double before it reaches saturation,” he said.