Britain goes for broke at 'rent to buy' chain

Shop specialising in 'buy now, pay later' deals to have 288 branches by end of year in recession boom

A chain of shops offering its customers rent-to-own goods on weekly payment plans that can add up to more than twice the items' face value is expanding across the country, following on the heels of high-street pawnshops and payday loan companies.

The little-known retailer BrightHouse announced yesterday that it will add a further 35 stores this year to the 253 it has already opened, responding to demand from recession-hit consumers for the latest domestic goods on credit.

The chain sells goods such as televisions, washing machines, cookers, mobile phones and computers to shoppers attracted by being able to spread the cost of brand new gadgets, despite paying more in the long-term.

The retailer's business model has come in for criticism for the prices it charges some of the most financially struggling members of society.

An article on national money education charity Credit Action's website says that "saving up to buy an item outright rather than using credit is often the wisest option".

To illustrate the point, it compares a Playstation 3 Bundle bought with optional cover from BrightHouse at £691.08 (£13.29 per week) with the best High Street or online price of £289.99, which is £401.06 cheaper.

But the chain's chief executive, Leo McKee, dismissed the disapproving comments and said: "The criticism is disappointing. My team and I have made a huge effort to be transparent."

He added the retailer had "enjoyed another year of exceptional growth".

BrightHouse's plans to open 35 stores this financial year represent a 40 per cent rise on the 25 it introduced in 2011-12. The chain, which employs more than 3,000 people, posted a 4 per cent rise in operating profits to £34.8m over the year to March 31 and revenues up 17.1 per cent to £266.5m, while its underlying sales at stores open at least a year rocketed by 7.3 per cent.

McKee added: "We are confident that both existing and new stores can continue to deliver solid growth and generate quality cash flow."

The retailer said it had been further boosted by a "surge" in TV sales in the first half of this year, driven by the recent European Football Championship and build up to this month's London Olympics. Debt campaigners warned consumers to be aware that hire-purchase shops like BrightHouse were offering a form of credit – just like the payday loan companies which have faced criticism for taking advantage of people in financial hardship.

Linda Isted, communications manager for national charity Debt Advice Foundation, said:  "Before anyone takes on any kind of credit, it's critically important that people look at their own financial position.  They need to work out their total household income, and the bills they have to pay every month – rent or mortgage, council tax and insurance, travel to work, food, overdrafts and secured loans, and a cushion for unexpected costs.  Most of us only have a rough idea of our monthly budget, and we often forget some outgoings."

She added: "Borrowers must be sure they understand the agreement they are entering into, however attractive the prospect is of the new purchase."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music
News
i100
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
Arts and Entertainment
The Apprentice candidates Roisin Hogan, Solomon Akhtar, Mark Wright, Bianca Miller, Daniel Lassman
tvReview: But which contestants got the boot?
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Provisioning Specialist

Negotiable: Recruitment Genius: A Provisioning Specialist is required to join ...

Recruitment Genius: Sales Apprenticeships

£10000 per annum: Recruitment Genius: This is an outstanding opportunity for 1...

Recruitment Genius: Customer Support Engineer

Negotiable: Recruitment Genius: A Support Engineer is required to join a well-...

Recruitment Genius: Customer Services Administrator - Swedish Speaking

Negotiable: Recruitment Genius: This is an exciting opportunity to join an awa...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum