Sears Canada to end credit card partnership with JPMorgan Chase
Sears Canada store is seen in this undated file photo. (Ryan Remiorz / THE CANADIAN PRESS)
David Friend, The Canadian Press
Published Monday, November 17, 2014 10:41AM EST
Last Updated Monday, November 17, 2014 12:05PM EST
TORONTO -- Sears Canada Inc. (TSX:SCC) will end its credit-card issuing partnership with U.S. bank JPMorgan Chase when the agreement expires next November.
The department store operator says it will work with JPMorgan Chase to consider sales options for the credit card portfolio. Under certain circumstances, the bank would pay Sears Canada up to $174 million.
The retailer has been slashing costs and selling off leases to some locations in an effort to turn its business around.
However, the company has been met with a number of setbacks, which include declining sales in an increasingly competitive market dominated by discount retailers.
JPMorgan Chase will remain the service provider for the Sears Card and Sears Mastercard until Nov. 15, 2015.
Neither company disclosed how many credit cards are managed under the agreement.
Sears Canada sold its credit and financial services business to JPMorgan Chase in 2005 for about $2.2-billion, which came with a 10-year "long-term marketing and servicing alliance" between the two companies.
Last month, U.S. parent company Sears Holdings Corp. announced it would sell the majority of its stake in Sears Canada through a rights offering to its shareholders.
The company also brought in Ronald Boire, an executive from the ranks of its U.S. parent, to replace its outgoing CEO Douglas Campbell.
Boire said in a recent interview that he plans to take a close look at each department and scaling back on products that don't sell like they used to, like flatscreen televisions and other large electronics.
However, he wouldn't rule out further store closures in the coming years.