From Home Furnishing Business
Conn's Signs Deal with New Provider for RTO Payment Option
Retailer Conn's Inc. (NYSE: CONN) said it has signed a three-year agreement with Progressive Leasing, a subsidiary of Aaron's Inc. (NYSE: AAN), that will offer lease-to-own payment options for customers who don't qualify for Conn's traditional credit program.
The retailer said it has been testing the Progressive program in selected stores since January, and will roll it out in all 115 locations in May and June.
“After an extensive review of our lease-to-own options, we decided Progressive’s growth-oriented culture, advanced decision-making capabilities and robust balance sheet provides Conn’s with a strong and committed partner," said Norm Miller, chairman and CEO of Conn's.
The announcement came a few days after Aaron's arch-rival Rent-A-Center (NASDAQ: RCII) said it is pulling all of its Acceptance Now rent-to-own kiosks out Conn's stores in June.
Rent-A-Center said the Acceptance Now business at Conn's has produced higher-than-average product return rates, delinquencies and losses.
Rent-A-Center, which is struggling to shore up its finances and return to profitability, said the closures "will result in immediate improvement in cash flow" for the Acceptance Now business.
“We recently announced a number of strategic initiatives to move our business forward and reposition Rent-A-Center and Acceptance Now for long-term growth and profitability," said Mark Speese, Rent-A-Center's interim CEO. "This decision advances our goal as we determined it was no longer in the best interests of the company and our stakeholders to renew the agreement as we focus on optimizing and growing the Acceptance Now business."
According to Conn's, the retailer notified Acceptance Now in January that it would not renew its one-year exclusive relationship, giving Conn’s the flexibility to offer and test alternative lease-to-own options. In February, Conn’s said it notified Acceptance Now that it was terminating the offering of the Acceptance Now option in certain Conn’s locations to allow Conn’s to test Progressive’s offering.
Miller said Conn’s in-house credit segment declined approximately 41% of the more than 1.3 million applicants for credit received this past year, but historically has converted a limited number of those applicants to lease-to-own sales.
"We believe there is a significant opportunity to grow our lease-to-own sales and look forward to partnering with Progressive to help us achieve this goal," Miller said.
“Progressive Leasing is excited to partner with Conn’s to provide lease-to-own solutions for Conn’s customers,” added Ryan Woodley, CEO of Progressive. “Our industry-leading virtual lease-to-own program offers an exceptional value and experience for customers. We have invested heavily in innovation to make this process as easy and transparent as possible for our customers.”
Speese said all Acceptance Now kiosks at Conn's will shut down at the close of business on June 6. The Acceptance Now accounts that are currently under the Conn's agreement will be merged into and managed by existing Acceptance Now or core Rent-A-Center locations in the U.S.