Rent-A-Center Hires Firm to Dispose of 220 Closed Stores
- Jan 07, 2008
Rent-A-Center has contracted Excess Space Retail Services Inc. to manage the disposition of 220 of its closed stores. The move follows its December announcement of plans to close approximately 280 stores across the U.S. The plan calls for the closure of the locations and for the merger of some of these locations with existing stores. The process is slated for completion in March.The company expects to incur pre-tax restructuring charges related to the store consolidation plan and other restructuring items in the range of $36 million to $43 million. These estimated costs are due mostly to lease terminations, fixed asset disposals and other miscellaneous items, according to company information. Cash outlay for the restructuring is pegged by the firm at between $26 million to $30.5 million in the next 12 to 18 months. The 280 stores identified generated revenues of approximately $140 million year-to-date through Oct. 31. These stores will transfer their customer rental purchase agreements to existing Rent-A-Center stores (pictured) and the company expects to retain the majority of these rental purchase agreements. At the conclusion of the restructuring, Rent-A-Center expects a pre-tax monthly operating income benefit in the range of $2 million to $2.5 million. Heading the real estate disposition assignment for ESRS will be Ben Dulman, senior managing director, and Paul Godles, managing director, from the firm’s East Coast office in Lake Success, N.Y.== Rent-A-Center, Inc., headquartered in Plano, Texas, currently operates approximately 3,355 company-owned stores nationwide and in Canada and Puerto Rico. Founded in 1992, Excess Space, with offices in Lake Success, N.Y., and Huntington Beach, Calif., provides regional and national real estate disposition, lease restructuring and lease renewal services.