Rent-A-Center Inc. (RCII) rations surged 11 percent in pre-market trade Thursday after the guests reported cost-cutting measures and said it was exploring “strategic and financial options” to boost shareholder value.
The rent-to-own company said it plans to cut its workforce by 25 percent or 250 dispositions in Plano, Texas as part of its long term plan to save $65 million-$85 million annually in operational costs. This curved of job cuts is estimated to save the company about $20 million in 2018, subsuming related administrative expenses of about $3 million.
In other vital moves, Rent-A-Center’s board said its reviewing all its options to boost its value for shareholders, classifying a sale of the company. It said it will make a decision on that argument in the second quarter.
“The company has received proposals from bidders interested in buying the company and the board and its advisors remain actively engaged with these sides,” Rent-A-Center said in a statement.
These announcements come just after the firm said it would eliminate its Chief Operating Officer position to perform it under the direct control of new CEO Mitch Fadel. (See also: Rent-A-Center CEO Robert Davis Resigns.)
Rent-A-Center slices are down more than 31 percent so far this year as it surfaces numerous challenges. The company, which has been closing stores, recently come in a 6 percent decline in fourth-quarter core revenue to $444.7 million. Excluding a enhancement from federal tax changes, the company reported a loss of $8.5 million during the favour.