About Rent-A-Center

Upbound Group, Inc. operates as a lease-to-own provider with operations in the United States, Puerto Rico and Mexico. The company provides a critical service for underserved consumers by providing them with access to, and the opportunity to obtain ownership of, high-quality, durable products under a flexible lease-purchase agreement with no long-term debt obligation. Through the company’s Rent-A-Center segment, the company provides a fully integrated customer experience through its e-commerce platform and brick and mortar presence. The company’s Acima segment offers lease-to-own solutions through retailers in stores and online enabling such retailers to grow sales by expanding their customer base utilizing the company’s differentiated offering. The Lease Purchase Transaction The company’s customer has the right, but is not obligated, to acquire title to the merchandise either through an early purchase option or through payment of all lease renewals that would be required to obtain ownership. Other lease-to-own transactions involve the customer leasing the company’s merchandise through all lease renewal terms required to obtain ownership of the merchandise at the conclusion of the final lease renewal term. In the Rent-A-Center segment, the product is often rented more than one time before a customer ultimately obtains ownership. There are differences in the unit economics between the company’s Rent-A-Center and Acima segments, as the company generally purchases its merchandise at wholesale prices for the company’s Rent-A-Center segment and at retail prices for the company’s Acima segment. The company’s customers make payments on a weekly, bi-weekly, semi-monthly or monthly basis in the company’s stores, at its retail partner locations, online or by telephone. The company accepts cash, credit or debit cards and payment via certain electronic platforms (such as PayPal and Venmo). In the Rent-A-Center segment, the company uses a proprietary decision engine to verify customer information as part of its approval process for entering into a lease purchase agreement. In the company’s Acima segment, which provides on-site or virtual lease-to-own options through third-party retailers and through Acima direct to consumer offerings, customers complete the application process through a variety of resources, including online digital waterfall technology, retail partner electronic portals, online e-commerce websites, and the Acima mobile application. In the company’s store locations and through its retail partnerships, the company offers merchandise from a large number of well-known brands such as Ashley home furnishings; LG, Samsung, and Sony home electronics; Frigidaire, Whirlpool, Amana, and Maytag appliances; HP, Acer, Asus, and Samsung computers and/or tablets; and Samsung smartphones. The company generally offers same-day or next-day delivery and installation of its merchandise at no additional cost to the customer in the company’s Rent-A-Center stores. The company’s Acima locations rely on its third-party retail partners to deliver merchandise leased by the customer, or for the customer to carry-out leased merchandise. The company’s third-party retail partners typically charge the company a fee for delivery, which the company passes on to the customer. In the company’s Rent-A-Center segment, and in the Acima segment where required by law, the company provides any required service or repair without additional charge, except in the event of damage in excess of normal wear and tear and certain other limited circumstances. Strategy The company’s strategy is focused on achieving its intention to elevate financial opportunity for all and growing the company’s business through emphasis on the following key initiatives: Grow penetration with Acima merchants and build on the company’s strength with small to medium size businesses while also adding new national and regional merchants to the company’s platform; At Rent-A-Center, accelerate the shift to e-commerce, improve the fully integrated omni-channel customer experience and expand product categories, which will increase brand awareness and customer loyalty; Leverage data analytics capabilities to attract new customers, approve more customers and mitigate risk across business segments; Upgrade and integrate technology platforms to allow for a more simplified and seamless consumer experience, merchant and third-party waterfall integration and consumer transaction process and coworker efficiency; Execute on market opportunities and enhance the company’s competitive position across both traditional and virtual lease-to-own solutions, and implement complementary products and services that supplement the company’s offering and provide its customers more financial alternatives; and Develop centers of excellence that will be leveraged across the organization to support the various business segments, utilizing best practices to drive efficiency and growth. As the company pursues its strategy, the company has the advantage of joint venture, partnership, or merger and acquisition opportunities from time to time that advance the company’s key initiatives and elevate the financial mobility of underserved consumers. Operating Segments The company operates through four segments: Rent-A-Center, Acima, Mexico, and Franchising. To better reflect the company’s strategic focus, the company’s retail partner business operations are reported as the Acima segment, which includes the company’s virtual and staffed business models; and the company’s company-owned stores and e-commerce platform through rentacenter.com are reported as the Rent-A-Center segment. In addition, the company reports operating results for its Mexico and Franchising segments. Acima The company’s Acima segment, which primarily operates in the United States and Puerto Rico, includes the operations of Acima Holdings, LLC (‘Acima Holdings’), which the company acquired in February 2021 and certain locations previously operating under the company’s Acceptance Now brand, generally offers consumers, who do not qualify for traditional financing, the lease-to-own transaction through staffed or unstaffed kiosks located within third-party retailer's locations, or other virtual options. In virtual locations, customers, either directly or with the assistance of a representative of the third-party retailer, initiate the lease-to-own transaction online in the retailers' locations using the company’s virtual solutions. The company uses a proprietary automated process to confirm certain customer information for approval of the lease purchase agreement, including certain information from consumer reporting agencies as part of the company’s decisioning process that may constitute a ‘consumer report’ under applicable law. The company’s lease-to-own solutions within the Acima segment are beneficial for both the retailer and the consumer. The retailer captures more sales and reduces their payment risk because the company buys the merchandise directly from them. Consumers also benefit from the company’s Acima model because they are able to obtain the products they want and need under flexible terms and without the necessity of relying on credit to finance a purchase or need to pay the full cost upfront. The company generally pays the retail price for merchandise purchased from its retail partners and subsequently leased to the customer. Through certain retail partners, the company offers its customers the option to obtain ownership of the product at or slightly above the full retail price if they pay within 90 days. In some cases, the retailer provides the company a rebate on the cost of the merchandise if the customer exercises this 90-day option. The company’s Acima operating model is highly agile and dynamic given the company’s virtual offerings and the company’s ability to open and close staffed and unstaffed locations quickly and efficiently. Generally, the company’s Acima staffed locations consist of an area with a computer, desk and chairs. The company occupies the space without charge by agreement with each retailer. In the company’s virtual locations, transactions are initiated through an electronic portal accessible by retail partners on their store computers, on the company’s retail partners' e-commerce sites or through the company’s Acima direct to consumer offerings, including the Acima mobile application. Acima relies on the company’s third-party retail partners to deliver merchandise leased by the customer. Such retail partners typically charge the company a fee for delivery, which the company passes on to the customer. In the event the customer wishes to return rented merchandise and terminate their lease, the company provides various return options. Most merchandise returned from an Acima lease-to-own transaction is subsequently donated or offered for lease at one of the company’s Rent-A-Center stores. Rent-A-Center The company’s Rent-A-Center segment consists of company-owned lease-to-own stores in the United States and Puerto Rico that lease durable goods to customers on a lease-to-own basis. The company’s Rent-A-Center segment operates through its company-owned stores and e-commerce platform through rentacenter.com. The company operates various company-owned stores in the United States and Puerto Rico, including retail installment sales stores under the names ‘Get It Now’ and ‘Home Choice.’ The company routinely evaluates the locations in which the company operates to optimize its store network. Mexico The company’s Mexico segment consists of the company-owned lease-to-own stores in Mexico that lease durable goods to customers on a lease-to-own basis. The company operates various stores in Mexico. Franchising Rent-A-Center Franchising International, Inc., an indirect wholly-owned subsidiary of the company, is a franchisor of lease-to-own stores. The stores in the company’s Franchising segment use its Rent-A-Center, ColorTyme or RimTyme trade names, service marks, trademarks and logos, and operate under distinctive operating procedures and standards. The company’s Franchising segment's primary source of revenue is the sale of rental merchandise to its franchisees, who in turn, offer the merchandise to the general public for rent or purchase under a lease-to-own transaction. The balance of the company’s Franchising segment's revenue is generated primarily from royalties based on franchisees' monthly gross revenues. The company franchises various stores in 30 states operating under the Rent-A-Center, ColorTyme, and RimTyme trade names. These lease-to-own stores primarily offer high quality products such as furniture and accessories, consumer electronics, appliances, computers, wheels and tires. Product Selection The stores in the company’s Rent-A-Center, Mexico, and Franchising segments generally offer merchandise from certain basic product categories: such as furniture, including mattresses; tires; consumer electronics; appliances; tools; handbags; computers; smartphones; and accessories. The company also provides merchandise options to its Rent-A-Center customers through the company’s extended marketplace on its e-commerce platform. The company’s furniture products include dining room, living room and bedroom furniture featuring a number of styles, materials and colors. Accessories include lamps and tables and are typically rented as part of a package of items, such as a complete room of furniture. Showroom displays enable customers to visualize how the product will look in their homes and provide a showcase for accessories. Appliances include refrigerators, freezers, washing machines, dryers, and ranges. Consumer electronic products offered by the company’s stores include high definition televisions, home theater systems, video game consoles and stereos. The company offers desktop, laptop, tablet computers and smartphones. In Mexico, the appliances the company offers are sourced locally, providing its customers in Mexico the look and feel to which they are accustomed in that product category. Acima locations offer merchandise available for sale in-store and online through third-party retailers, including furniture and accessories, consumer electronics and appliances, wheels and tires, and jewelry. Marketing The company promotes its products and services through radio and television commercials, print advertisements, store telemarketing, digital display advertisements, direct email campaigns, social networks, paid and organic search engines, website and store signage. The company’s advertisements emphasize such features as product and name-brand selection, the flexible payment and return options, the ability to avoid relying on credit to finance a purchase and without requiring long-term contracts or obligations, convenient delivery and set-up, product repair and loaner services, lifetime reinstatement and multiple options to acquire ownership if desired by the customer, including early purchase pricing options or through a fixed number of lease renewal payments. In addition, in the Rent-A-Center segment, the company promotes the ‘RAC Worry-Free Guarantee’ to further highlight these aspects of the lease purchase transaction. By leveraging the company’s advertising efforts to highlight the benefits of the lease purchase transaction, the company will continue to educate its customers and potential customers about the lease-to-own alternative to credit, as well as promote the company’s reputation as a leading provider of high-quality, branded merchandise and services. Seasonality The company’s revenue mix is moderately seasonal, with the first quarter of each fiscal year (year ended December 2023) generally providing higher merchandise sales than any other quarter during a fiscal year. The company’s cash expenditures for merchandise purchases for the fiscal year are generally the highest beginning in the latter part of the third quarter through the fourth quarter, primarily as a result of holiday promotions. Trademarks The company owns various trademarks and service marks that are used in connection with the company’s operations and has been registered with the United States Patent and Trademark Office. In addition, the company has obtained trademarks and filed for trademark registrations in Mexico and certain other foreign jurisdictions. The Franchising segment licenses the use of the Rent-A-Center and ColorTyme trademarks and service marks to its franchisees under its franchise agreements with such franchisees. The Franchising segment also owns various trademarks and service marks, including ColorTyme and RimTyme, that are used in connection with its operations and have been registered with the United States Patent and Trademark office. History The company was founded in 1960. It was incorporated in Delaware in 1986. The company was formerly known as Rent-A-Center, Inc. and changed its name to Upbound Group, Inc. in 2023.