(Reuters) - Activist investment fund Engaged Capital LLC urged the board of furniture retailer Rent-A-Center Inc (RCII.O) to start evaluating strategic alternatives, including a sale.
The board and management are looking at strategies to cut costs and boost revenue, the company said in a statement late on Tuesday.
These measures would be announced in the near term, Rent-A-Center said.
The company’s shares reversed course and were down 4.4 percent at $8.03 in afternoon trading. They had gained as much as 5.3 percent after Engaged Capital’s letter.
Rent-A-Center had a market value of $449.1 million as of Monday close.
Sales at the rent-to-own retailer have been declining for over a year, including a 13.8 percent drop in the latest quarterly report on Monday.
The fund, which said it had a 12.9 percent stake in Rent-A-Center, also disclosed that it was prepared to nominate independent directors at the company’s annual shareholder meeting.
The company’s shares have declined 75 percent over two years under the current board, Engaged Capital said.
Rent-A-Center also said its board was conducting a search to succeed interim Chief Executive Mark Speese and a permanent CFO.
The company’s chief executive left in January, a month after its chief financial officer resigned.
Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila