Sears Seals Card Deal
By George Anderson
It’s a done deal. Sears has sold its credit card business to Citigroup for $3.2 billion, according to TheStreet.com Web site.
The credit card division had been more profitable than Sears’ various retail store businesses. The company decided to seek a sale when it became clear that a growing number of consumers defaulting on loans and bad debt were forcing chairman and chief executive Alan Lacy and his management team to concentrate on the credit card division at the expense of the core retail business.
Mr. Lacy issued a statement on the sale of the credit card business to Citigroup. “Our new strategic partner (Citigroup) will provide world-class service and our customers can expect to receive the same features and benefits they now enjoy. In addition, Sears’ retail business will benefit from the continuation of credit availability for our customers and zero percent financing promotions.
“Proceeds from the transaction are intended to be used primarily to retire debt, return cash to shareholders and for general corporate purposes,” said Mr. Lacy.
Moderator’s Comment: What is or should be next for Sears now that the sale of its credit card business is final?
The company obviously has some money to work with and a number of people we’ve spoken to expect to see the retailer ramp up its Sears Grand store program.
Of course, we’ve also heard mixed reviews on the Grand store in Utah. [George
Anderson – Moderator]
- Sears Statement on Sale of Credit Business
- Sears Completes Credit Card Portfolio Sale to Citigroup – The Street.com