Radio Rentals conjures images of mutton-chop sideburns, Ford Cortinas and episodes of The Sweeney on ailing television sets. However, one of its direct descendants is beginning to recapture the place it lost on the high street through the rise of the likes of Currys, Dixons and Comet and the decline of the price of TVs.

BrightHouse was spun off from Thorn-EMI, the owner of Radio Rentals, by Terra Firma, Guy Hands's private equity group. It earned infamy for exorbitant APRs and costly extra cover. Now, the chain is on the front foot, attempting to clean up both its stores and its reputation as it embarks on an ambitious growth programme. It plans to open 21 outlets next year and calculates that there is room for at least 600.

Only a dozen of BrightHouse's 178 stores are in Greater London, but, as Leo McKee, the straight-talking chief executive of the chain, is fond of saying, the high street becomes a very different place beyond the M25.

Its customers, almost exclusively from the lower socioeconomic groups, are finding credit increasingly difficult to come by - if they ever could - as lenders cut their risk profiles.

“We're going into areas that [Lloyds] TSB are pulling out of,” Mr McKee said. The prospect of BrightHouse stepping in to deliver credit to our most deprived communities will not fill everyone with joy. However, the Scot insists that this is an outdated perception. “When I took over [in 2004], we commissioned independent research to examine the proposition, asking: ‘Is it sufficient?' and: ‘Does it have longevity?' he said.

“The results came back: your name on the high street is garbage; you're seen as a rip-off merchant; the prices were high, the stores shabby.

“The first thing I did was to change all the prices to match the high street, on the day I found out [the results].”

The previous thinking was that as long as customers could afford the £10 a week, for example, they would not notice or worry about the cash price. And this thinking had knock-on effects right through the business.

“My buying director is the former buying director of Comet. Before I appointed him, we were paying more wholesale for our washing machines than they were selling them for in Currys.”

Robust discussions with suppliers followed. Does BrightHouse have difficulty persuading suppliers that they have nothing to lose in displaying their wares in some of Britain's most down-at-heel neighbourhoods?

“It can enhance a brand,” Mr McKee said firmly. “If you and I went for a beer, it would not be very long before I talked to you about my children ... we might talk about my car or the nice restaurant we were in last night. My customers have none of that. Their status in society is defined by their television.”

He said this with neither embarrassment nor condescension. “Our customers want brands. Our customers want quality.” This was one of the reasons that “we were able to get away with rip-off prices, years ago”.

With a typical APR of 29.9 per cent, BrightHouse is above the basic 24.9 per cent charged by Currys, for example. However, Mr McKee said that most of the difference was accounted for by the right-to-return policy. Last year it made a pre-tax profit of £1.48million but paid £7 million in interest to Vision Capital, its private equity owner, and another £5.9 million on separate financing expenses. BrightHouse actively roots out mis-selling of additional cover by questioning stores with consistently high take-up rates, Mr McKee said. However, more than two thirds of customers do take up the extra cover.

It is too simple to say that the space that BrightHouse seems to have carved for itself came about because of an absence of liquidity. “That's an M25 view,” he said. “Even at the peak of easy credit, banks wouldn't lend to our customers. This is the credit-impaired group in Britain who don't have access to loans.”

As the liquidity crisis enlarges that group, BrightHouse is waiting. It estimates the “alternative credit market” to be five million-strong and has 140,000 customers a month. By that reckoning, we could be seeing more of BrightHouse - perhaps even within the M25.

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