13 Nov Kmart Offers New, Costly Path to Purchase
(RetailWire – November 13, 2013) Like its sister company, Sears, Kmart has achieved a degree of success with its layaway plan by catering to consumers on the low-end of the economic ladder. Now, Kmart is following the lead of its older sibling by catering to cash- and credit-strapped consumers with the launch of a lease-to-own program.
Last November, Sears announced it was rolling out a lease-to-own program in partnership with WhyNotLeaseIt, a company that also works with Ashley Furniture, Discount Mattress and Jennifer Convertibles, to all its stores.
“Kmart’s lease-to-own program will help ease some of the financial barriers our members and customers will face this holiday season,” said Jai Holtz, vice president, financial services, Sears Holdings, in a statement. “For members and customers who have an immediate need, lease-to-own gives a full house assortment of products and a way to pay.”
As Sears found out, offering such a program brings on critics who argue that the markups on products are onerous. Bloomberg News reported that a $300 television would wind up costing a consumer $415 in the end.
“I’m not here to convince you lease-to-own is not more expensive than a credit program,” Mr. Holtz told Bloomberg. “Our total cost of ownership, for a customer who otherwise cannot get credit, is much lower than the others in the industry offering these types of products. This is really coming from consumer demand.”
Kmart’s lease-to-own program will be available on items costing $150 or more beginning on Nov. 22 in stores across the U.S.
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