Sears Canada Inc. will sell its credit card and financial services business to JPMorgan Chase & Co. for $2.2 billion, the two companies said yesterday.
As part of the transaction, Sears and JPMorgan Chase will enter into a long-term marketing and servicing alliance during which JPMorgan will provide credit and customer service benefits to Sears private-label and co-branded Sears MasterCard holders in Canada. Sears Canada expects to receive more than $100 million in annual payments from JPMorgan based on credit sales and new account generation.
The two companies also plan to jointly develop and introduce new features, products and services to drive incremental sales at Sears Canada.
Sears Canada's credit and financial services business includes 10 million accounts and $2.5 billion of receivables.
The deal will accelerate “progress toward building a Sears that is completely focused on the profitable growth of our core retail and related services business,” Sears Canada president/CEO Brent Hollister said in a statement.
The transaction is expected to close by year-end.
Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters