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S&P downgrades Rent-A-Center
S&P said it downgraded the corporate credit rating on Rent-A-Center Inc. to BB- from BB.
The agency also said it lowered the rating on the company's secured bank facilities to BB from BB+ and on the unsecured debt to B from B+.
The recovery rating on the secured debt is 2, indicating 70% to 90% expected default recovery.
The recovery rating on the unsecured debt is 6, indicating 0 to 10% expected default recovery.
The outlook is negative.
The ratings and negative outlook reflect continued challenges in the company’s core retail business, S&P said.
The company continues to experience accelerated market share losses with negative same-store sales of 12% in the core business in the third quarter of 2016, the agency said.
S&P also said it sees further profitability downside potential if the company cannot successfully optimize product categories, resize its large store base and solve various proprietary point-of-sale system performance issues that are hurting sales and margins.
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