Sears sells card business for $32bn
Citigroup snaps up world’s biggest storecard brand
July 16 2003
US retailer Sears, Roebuck has agreed the $32bn sale of its credit and financial products business to Citigroup.
The Sears card is the world’s biggest retail credit card, with around 23m active users and annual revenue in the US of around $29bn. The deal will also see Sears and Citigroup form a long-term marketing and servicing partnership to retail financial products and services, initially to run 10 years.
Sears announced in March that it was considering a sale of its credit business in order to concentrate on its core retail offer. The retailer Sears expects annual revenues of around $200m from Citigroup’s sales of credit and other financial service to Sears Card and Sears Gold Mastercard holders, as well as another $200m in annual savings. The 8000-plus employees of Sears’ finacial services arm will transfer to Citigroup.
Sears chairman and chief executive officer Alan Lacy said: “This is a great deal for Sears, its customers and shareholders. Our customers will enjoy broader credit and financial products opportunities and continued high levels of service, while Sears gains an additional source of profitability and greater financial flexibility.
“We are delighted to be involved in a strategic alliance with Citigroup. They are a world leader in proprietary, co-branded and general purpose cards, with world class technology, powerful financing capabilities and excellent customer relationship management skills.
“This strategic action will also create significant value for our investors by accelerating progress toward building a Sears that is completely focused on growing our core retail and related services business, further simplifying our organisation, strengthening our financial position and returning substantial proceeds to shareholders.”
