Spiegel to Sell its Credit Card Business After Posting $397.6M Loss
Spiegel also plans to sell its First Consumers National Bank subsidiary.
"We have made a strategic decision to remove the credit card operations from our business mix to intensify our focus on our core retail business and strengthen our financial position," Martin Zaepfel, vice chairman, president/CEO of The Spiegel Group, said in a statement. "As part of this transaction, we will form a relationship with a third-party to provide private label credit card programs to our customers."
The company said net sales for 2001 fell to $2.8 billion, from just over $3 billion in 2002. For the fourth quarter, Spiegel reported net sales of $920.9 million, compared with net sales of more than $1 billion in the fourth quarter a year earlier. Its net loss for the fourth quarter was $378.1 million, or $2.86 per share.
Spiegel's Eddie Bauer division reported sales for 2001 fell 9 percent to $1.6 billion, from $1.7 billion in 2000. Net sales at its Newport News division fell 6 percent for the year to $488.9 million, from $479.1 million. Spiegel catalog sales declined 12 percent to just over $734 million, from $833.4 million a year earlier.
The company recorded an estimated loss related to the sale of its credit card business of $310.5 million, or $2.35 per share as discontinued operations.
Spiegel also said it expects revenue for 2002 to be flat to slightly down, compared with 2001.