Tom Devlin said his son’s struggles with schoolwork led to the sale of Rent-A-Center.
That was one of the revelations the 66-year-old entrepreneur and founder of the national rent-to-own chain made on Tuesday to a full lecture hall at the Wichita State University Center for Entrepreneurship Meritrust Entrepreneurship Forum.
The event, held in the center’s Devlin Hall, was attended by WSU president John Bardo and U.S. Sen. Jerry Moran, R-Kan. A public reception to mark the 25th anniversary of the building was held following the question-and-answer session that included Devlin, the center’s interim director Lou Heldman, and Don Hackett, a professor and former center director.
Devlin Hall is named for the entrepreneur, who donated $5 million for construction of the building.
Devlin said that while on a fishing trip to Canada in the summer of 1987 with his oldest son, Tommy, they were discussing his difficulty with schoolwork. At that point in the company’s business, Devlin said, he was frequently away from Wichita on business. Devlin said he offered to help his son, who replied, “ ‘Dad, how are you going to do that, because you’re never home?’ ”
Soon after that, he said, he had similar exchanges with his other son, Tim, and his wife, Myra. The family’s discontent with Devlin’s schedule came to light at nearly the same time eventual suitor Thorn EMI, a British concern, was in the market for an American company like Rent-A-Center.
“It looked like a brilliant move,” Devlin said. “It was all luck. If my son Tommy had not made me aware I had a problem I wasn’t going to sell the company.”
He said Rent-A-Center was sold for 42 times its earnings, in cash.
Devlin said he wasn’t a great student before he enrolled at WSU. He said his counselor looked at his transcript and said, “ ‘Tom, college isn’t for everyone.’ ”
He told the audience that he thought he was successful with Rent-A-Center for a number of reasons. One, he saw that competitors in the rent-to-own business were going after just a small part of the market. “I found out there was a huge market out there, a huge number of people who had made mistakes with their credit they just needed a way to get financed,” Devlin said.
He said the company emphasized treating customers with respect, such as requiring store employees to address all customers with courtesy titles such as Mr. and Mrs. The stores had play areas set aside for children, who also were given free candy on their visit.
“We wanted them to walk away with the best experience they could have,” Devlin said.
He also gained practical experience working for someone else before starting Rent-A-Center with the help of W. Frank Barton, who was an equal partner in the company up until its sale.
And he said he was lucky enough to have a number of successful entrepreneurs – Pizza Hut founders Dan and Frank Carney and Ken Wagnon – who were at first advisers and later members of Rent-A-Center’s board. “They took me under their wing and they grew me.”
After the sale of the company, Devlin focused on investing in companies that he felt he could advise and help manage on a short-term basis if needed.
He advises investors to stick with what they know. For instance, he wouldn’t invest in technology companies, he said, because they operate outside his arena of expertise and experience.
“Once you’re successful, staying successful is the hardest,” he said. “I’m more proud of holding on to what I have than probably what I have made.”
Devlin also said his best investments have come from deals struck outside an office.
“I’ve made more good investments playing golf and hunting,” he said, adding that playing golf with Vic Scholfield is how he became an investor in the Scholfield automobile dealerships. Golfing also helped him secure a partner in the purchase of the Flint Oak hunting and fishing club and resort in southeast Kansas.
“It’s much easier to make a deal on the golf course than across the desk,” he said.