Rent-to-own company touts furniture and bedding sales initiative as ‘new source of profit growth’

BOCA RATON, Florida — Hire-to-own retailer and payment solution provider FlexShopperwhich offers pay-as-you-go options to hundreds of retailers and their customers, is growing its own retail profile through 40 wholesale partnerships, including select furniture and bedding brands.

Described by CEO Richard House Jr. during the company’s second quarter earnings call as FlexShopper’s “new source of earnings growth,” the retail initiative relies on direct partnerships with manufacturers and the distributors.

Using FlexShopper.com as a place of sale, House explained that the new model “allows us to derive profitability from the retail itself as well as the profitability from the lease that funds that retail.”

House said that over the past year the company has assembled a small team of retail professionals to focus on this initiative, which included signing 40 furniture wholesale partners. , bedding, jewelry and more.

“We currently have a relatively low penetration rate in our market for these types of consumer goods, and we would like to fill that gap,” he said.

The company did not identify its furniture partners or brands in the earnings call. However, FlexShopper owns trademarks to the brand names Casaveh for home furnishings and Regala for jewelry, both of which appear on the FlexShopper.com site.

House noted that although Flexshopper.com is a retail environment, “the vast majority of our market profits come from the revenue we derive from the rental transaction with very little retail market profit”.

Under FlexShopper’s system, online customers can apply for credit and, if approved, purchase products from retailers such as Ashley Furniture, Overstock and Best Buy and sign a rental agreement that involves 52 weekly payments. for the property. They also offer their rent-to-own model to hundreds of physical business partners.

The company began testing its new online retail initiative in the second quarter of 2022, and House called early results promising.

“Like lending, this retail line of business is complementary to what FlexShopper has done in the past and therefore does not require significant additional investment,” he said.

In response to an analyst’s question, House said it’s too early to tell how much additional margin they’ll be able to capture in the FlexShopper website market with this model. “It’s a relatively new business, so we have no idea how big it might be, but it’s something that’s evolved to the point where we think we’re talking about it as a diverse line of business. .”

Chief Financial Officer Russ Heiser reported that FlexShopper’s second quarter 2022 total revenue was $36.5 million, up 19.1% year-over-year and 26.2 % compared to the previous period. Rental revenue was $30.5 million, down 0.6% year-over-year but up 9.7% from the prior quarter, and loan revenue were $6.1 million, up from just $26,000 a year ago and up more than 400% from the prior quarter. .

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