July 15, 2003
Sears is selling its credit-card business to Citigroup for about $32 billion. Sears has about 59 million credit card accounts, 25 million of which are active. That makes it the eighth-largest in the U.S. and the largest remaining in-house private label portfolio.
The deal doesn't mean there won't be a Sears credit card. Citigroup will continue to provide Sears Card and Sears Gold MasterCard accounts. The deal will save Sears $200 million in operating costs and will receive another $200 million in annual performance payments from Citigroup.
The sale also relieves Sears of a rapidly rising number of bad debts.
Sears was the last of the big retailers to operate an in-house credit card division. It relied on profits from the credit operation to smooth out bumps in retail revenue.
The deal is expected to close around the end of the year. Consumers should not notice any immediate change.
