RCII
#No, <UNK>, you may recall there are a number of different levers that you can pull in this business, so when we talk about pricing there is the weekly or monthly rental rate, there is the term in which to acquire ownership, the number of weeks or months.
And then there is the EPO formula that goes into that to the extent the customer wants to exercise.
And you can pull a combination of those levers, one of those levers, and so forth.
Candidly when I talk about opportunity to enhance the proposition, I think we can lower the terms which will enhance the value to the customer without increasing the rate, because they allowed those terms to go out quite a ways trying get margin.
And it has devalued the proposition and it's had a negative impact on sales.
So, part of it is right-sizing ---+ reevaluating the inventory that's in there and setting the proper rates and terms and then the bigger opportunity is the mix as we go forward.
That is where we are going to have a bigger opportunity to enhance the value proposition for the customer.
Well, as I said in my prepared remarks, looking historically, if you think of good, better, best and that is how we kind of describe our products and that may have to do with the quality of the merchandise, the features and benefits of the merchandise, the material that is in the merchandise, i.
e.
, leather versus vinyl, a refrigerator with an ice-maker versus one without, et cetera.
Historically, and again those are the aspirational products, when customers, any of us buy we have needs and wants.
The emotional side of a purchase is fulfilling the want, not the need, and I believe that is where our opportunity lies is to put a greater focus on fulfilling the emotional side, the want, which is a higher mix of the better and best.
And, as I said in my prepared remarks where we had been historically about 60% or so between the better and best, today it is only 45%.
So a much greater shift at a lower cost value if you will, and again that's had the 8% decline on our pricing, the APU.
So it is not about charging more for the same, it is about increasing the value proposition for the customer.
As you know, we are in a fixed cost business so to the extent you can drive or increase the rental associated with any agreement, the flow through could be pretty significant to the bottom line because of the fixed cost nature of the business.
That is a good, good question, <UNK>, and in fact the mix is not materially different than historical, i.
e.
, 25% or so new and 75% previously rented.
So it is not so much a new use it is the mix.
Part of the reason they have the new is it because, again the amount of buys that were made in the fourth quarter, the promotional, if you will and as we said, the fourth quarter was not as good as the company had hoped, and so there is plenty of new inventory in the system.
I think that we can work through it in the ordinary course of business.
You know we've been trying to take advantage of the income tax season when it comes and so how we might be able to move inventory quicker than you would have otherwise, given the time of the year but this is not a used inventory problem.
Thank you <UNK>, I will be honest, the metrics that we picked directionally will tell you everything.
So, we are in a relationship business having stability and continuity in customer facing coworkers is critical, hence the reason that we want to provide the turnover.
So as we can make improvements and strengthen the workforce, improve the customer relationships or selling skills and collection skills, that is going to show there.
The delivery APU, this notion of our value proposition and going to more of the better, best from good is why, again you should see the delivery APU, so what our customers wanting to rent today.
Are they in fact coming in and getting the aspirational products.
And again, fixed cost nature we drive the revenue per agreement, that's going to show the positive impact to the top line and then the flow through to the bottom line.
Collections, again the quality of the portfolio it does no good to put a lot of products on rent if you cannot then collect on them or manage the accounts when they are out there.
So, the delinquency is an important characteristic and also how much time is being spent on that aspect of the business versus being able to spend additional time on the sales side.
So any of these that we team up with really they are leading indicators and given the portfolio nature, you want to see those kinds of trends first because it's going to draw the picture, the road map, of where you're going to end up six or nine months down the road.
I think there's a couple of things, as they continue to have ---+ the mix of partners, meaning as you get into more multi-line partners rather than a furniture only, some of the behaviors are little bit different across the product lines.
So, as we expand into multi-line partners that are introducing the other SKUs, they have historically performed a little less, and so as that mix shifts you're starting to see some of that in the overall results.
There are opportunities, as I said I think some of the ---+ it is fair to say much like the core, that there are some executional opportunities as we think about across all of the businesses, whether that is collections and sales or so forth.
So part of it is a mix of the relationships that we have and the products that we're putting through that pipeline.
And then the other part is we need some further enhancements in our risk engine and the training and accountability inside the coworkers.
I'm not going to get into the specifics, they are narrow test and they will run for six months and then we will be in a position to share more as we get further down the road.
I'll make sure I understand the question there, the average length of time that an agreement is on rent, is what you're asking.
Okay, the average rental agreement in the core businesses is on rent approximately 4 to 5 months on average.
The average piece of inventory is in our system approximately 18 or 19 months on average.
Some of that was currency related, yes, there was also a bit of an uptick in the skip stolen losses within Mexico.
But overall for the year we were EBITDA positive which was the goal we outlined at the beginning of the year.
No, again, my lens is narrow if you will, compared but <UNK>, I don't have ---+ if anything appears maybe be a little bit of a tightening.
I think just since the recent change I don't know if we've seen any further impact but it is a challenging competitive environment.
We do feel that our customer base has more access to credit than they had historically, and that is impacting our business.
But as far as the recent changes with interest rates, I don't believe we've seen any material changes.
Those are approximate numbers, a dozen and two dozen.
We are expecting, anticipating both of those tests starting sometime in March, the agreements have been signed and the test periods are six months in both cases.
I'm not sure I understand your question.
I'm sorry, yes, I think there are some opportunities to continue to expand the manned store locations that we have with our current partners.
Where we want them or where we have agreed, is probably higher than that, I think we're pretty close.
But I will tell you, and again, Acceptance Now even beyond these two national tests, they continue to work potential new partners also.
So not just what we already have, but there's other smaller regional state partners, if you will, that we are continuing to develop also.
Well, there has certainly been cannibalization within product categories.
Advancements in technology, you know we see it.
The computer is going from the desktop to the laptop to now the smart phones, and so there has certainly been some cannibalization across product categories.
At the same time, I don't think any of us don't have a TV in our house, so there's still plenty of opportunity.
It's about 5% of our revenue.
I will have to follow with you later on that, <UNK>, I don't have that in front of me.
But it is posted on our website, we have all of the segment financials that were posted last evening that should have that number.
Yes it is there, we just don't have it.
Thank you.
Thank you.
Ladies and gentlemen, thank you all for your support and your interest this morning.
Please know that we are keenly focused and we are taking aggressive actions to improve our operations and results and to drive overall shareholder value.
I look forward to reporting on our progress in the coming months as we move forward.
Thank you again and have a great day.
