NATM Dealers Hear Pitch on Rent-a-Center’s RAC Acceptance Kiosks

RAC met with NATM’s board as it sought to build on the pacts it has with ABC Warehouse, BrandsMart, Conn’s, Cowboy Maloney’s and R.C. Willey. BrandsMart, Conn’s and Cowboy Maloney’s are chainwide with RAC, while ABC is testing the concept in 10 to 12 locations and R.C. Willey in three or four.

RAC kiosks, typically located in the area of a store where credit applications are processed, are designed for customers that don’t qualify for conventional credit with a retailer, but can still rent products with a minimum seven-month lease, said Keith Smith, senior director of business development at RAC. RAC Acceptance typically signs agreements with five to 12 percent of a retailers’ customers that otherwise would left the store without making a purchase, Olson said.

"It’s the path of least resistance for a person that otherwise would not be able to make a purchase, BrandsMart President Michael Perlman, whose nine-store chain first deployed RAC in late 2011. “We're not obvious about it” in the stores and “it’s not for everyone, but it gives the customer the option to pay as they go."

While the kiosks, which are staffed by RAC employees, may not perform as well in a higher income area like that near BrandsMart’s Boca Raton, Fla., location, it has proved more popular in Miami, Perlman said. At Cowboy Maloney’s in Mississippi, RAC Acceptance has accounted for 5 percent of chain’s gross revenue since being deployed in November, Vice President Eddie Maloney said. “I don’t think I have ever had anything [that] has gotten this good this fast,” said Maloney, whose chain has 12 stores.

The program covers up to $3,000 and agreements are paid on a monthly basis over 12-, 24- or 36-month contracts, said Michael Olson, national business development sales representative at RAC. The average RAC Acceptance agreement is for $1,200 with the average monthly payment being $100 to $120, Olson said.

TVs and major appliances are the most popular items financed by the program, Perlman said. RAC Acceptance purchases the rented product from the retailer at full price and assumes responsibility for it, Olson said. In a departure from the typical rent-to-own customers whose average income is typically under $50,000, RAC Acceptance falls between $35,000 and $85,000 annual income, Olson said. It costs Rent-a-Center about $10,000 to install the format, company executives have said. For the format to operate efficiently, the host store must average at least 30 turndowns per month for credit and be at least 15,000 square feet, Rent-a-Center executives have said.

RAC Acceptance has so far been installed in 847 locations across 127 dealers, up from 750 in late 2011 and will a goal of reaching 930 locations by year-end, company executives have said (CED March 6 p3). Rent-a-Center in January slashed its forecast for new RAC Acceptance openings this year to 200 from 445 (CED Feb 1 p3). Among the largest deployments have been with Ashley Furniture, Rooms to Go and Value City locations. It also has been in tests with Best Buy in California and Slumberland Furniture, which has 125 stores. Rent-a-Center launched the RAC Acceptance business in 2011 following its acquisition of The Rental Store (TRS).

NATM Notebook

Amtran Video Corp. (AVC) will launch its 55-inch JVC TV with embedded SlingPlayer technology on the Home Shopping Network (HSN) Sept. 23, where it will be priced at $1,349 and air 11 times that day, Drew Pragliola, vice president of sales, told us. AVC is a subsidiary of to Taiwanese OEM Amtran and has a licensing agreement with JVC for TVs. After the initial run on HSN, the set will drop to a $1,299 minimum advertised prices as it expands to other retailers. The Sapphire-series LED backlit 55-inch set will contain 802.11n wireless technology and be the industry’s first to feature the 2 MB SlingPlayer application, AVC has said. The 3D-capable set also can access Hulu, Netflix and Vudu, AVC said. EchoStar’s SlingPlayer application won’t allow for the place-shifting of content that’s enabled in Sling standalone devices, AVC said. Instead, the SlingPlayer technology will allow for shifting of programs to other Dish Network devices in the home, AVC said. The SlingPlayer application will be store in the TV’s 4 GB of flash memory, but will eventually move to Dish servers. It uses an LG Display flat pattern retarder LCD. There are no plans for Dish to cross-promote satellite with the TVs, Pragliola said. The SlingPlayer technology is owned by OEM supplier EchoStar. AVC’s JVC TVs are available through a range of retailers including 32-, 37- and 47-inch models at Costco. NATM dealers carrying the JVC sets include BrandsMart, P.C. Richard & Sons and Video Only, Pragliola said. AVC is shipping 32- ($269) and 37-inch ($369) direct LED backlit JVC TVs, as well as 42- ($599) and 47-inch ($699) edgelit LED models. The 32-inch set was priced at $329 in June, while the 37-inch carried a $349 tag. AVC is weighing introducing 46, 50, 58 and 65-inch edgelit and direct LED backlit LCD TVs in 2013, Pragliola said. AVC had been expected to have a 50-inch direct LED backlit set this fall, along with 55- and 65-inch edgelit models (CED June 29 p3).

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Nebraska Furniture Mart increased its assortment of private-label Berkshire-brand CE products to 150 SKUs from 50 SKUs a year ago with the addition of more TVs and accessories, said Mark Shaw, CE division merchandise manager. The products are nearing 10 percent of Nebraska Furniture’s CE sales, Shaw said. The Berkshire products, named after Nebraska Furniture’s owner Berkshire Hathaway, include 32-, 39-, 46- and 55-inch LCD TVs as well as wall mounts, DVD players, digital audio players and cables. Shaw is headed to China in October to negotiate deals for 2013 Berkshire products for 2013, including surge protectors, he said. In assembling the line, Nebraska Furniture has worked with Etec USA, an importer headed by former Best Buy executive Lee Schoenfeld. Nebraska Furniture, which introduced the Berkshire brand last year, recently began promoting it in newspaper ads, Shaw said. Nebraska Furniture Mart’s Omaha, Neb., store also doubled the space dedicated to cellphones and exercise equipment. The Omaha store kept the 121 cellphone models it carried before but added floor space, company officials have said. The area dedicated to exercise equipment was doubled to 5,000 square feet, still below the 12,000 square feet it covers at Nebraska Furniture’s Kansas City, Mo., location.

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Retail chain Curacao, fresh from a re-branding, will open a new store in Tucson, Ariz., late this month and is scouting for additional locations in Arizona, said Joaquin Stiker, vice president of merchandising. The eight-store chain dropped the “La” from its Curacao brand mid-summer to reflect a widening base of second- and third-generation Hispanic customers, where English has become a primary language, Stiker said. The chain also added a bird of paradise graphic to its logo. While Curacao will continue to focus on Hispanic customers and a credit business that accounts for 90 percent of its revenue, it was time to update the chain’s image as it expanded into new markets from its base in the Los Angeles area, Stiker said. The 70,000-square-foot Tucson location will be the chain’s first to bear the Curacao banner minus the “La,” which also has been dropped from other locations, Curacao executives said. The Tucson store will source products from Curacao’s 120,000-square-foot Phoenix store, which will double as a distribution center, Stiker said. Curacao also will target customers from Nogales, N.M., 50 miles away, executives said. The chain’s stores, many of which average 100,000 square feet and up, carry a broad range of products from cosmetics and jewelry to major and small appliances and CE gear. Its CE and PC businesses, which include Coby, LG Electronics, Panasonic, Samsung and Toshiba brands, account for nearly half its annual revenue, Stiker said.