Sears Roebuck considers sale of $30bn card business
US retailer looks to focus on core business
March 27 2003
Sears Roebuck is considering a sale of its credit business in order to concentrate on its core retail offer.
Sears’ Credit and Financial Products business is the eighth largest US credit card operator, managing $30.8bn in card payments last year, and with around 25m active accounts. The Sears Card has the largest retail credit card customer base in the world, generating $18.4 bn in sales, with the remaining coming through Mastercard.
Options for the business could include a partnership with a financial services operation as well as an outright sale.
Alan J. Lacy, chairman and chief executive officer, said: “Sears’ Credit and Financial Products business is extremely attractive and highly profitable. It continues to perform well and is on track to deliver on its 2003 financial plan.
“However, we believe the tremendous value and earnings power of these assets are not reflected in today’s market valuation of Sears. By selecting the right strategic partner for this unique business, we believe we can create significant value for our investors.
“This strategic action will support our sharpened focus on strengthening and growing Sears’ profitable retail and related services business, while further streamlining our organisation, reducing leverage and returning cash to shareholders.”
In January, Sears said problems in the US economy had led to a slight increase in repayment problems experienced by consumers.
