Sears Card For Sale!!!!!!!!!!!!!!!!

Sears confirmed late yesterday it is looking to unload its $30.8 billion credit card portfolio. The company says that even though its credit card business generated more than $1.5 billion of operating income last year and produced more than 60% of total profits, it wants to focus on its core retail business

 

It doesn't affect you as a customer. It will run by some finacing companies like MCCBG/GE Capital, Citibank or Household Retail Serivices. You use same way as you do right now.


Ron.

 

The new Sears

Selling off the credit-card unit is supposed to unlock value -- but just look at what's left.
March 26, 2003: 5:55 PM EST
By Adam Lashinsky, CNN/Money Contributing Columnist

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PALO ALTO, Calif. (CNN/Money) - Riddle me this: What do you get when a giant credit-card company masquerading as a retailer sheds its credit-card operations?

The answer, of course, is Sears, Roebuck & Co., the venerable company that used to call itself the World's Largest Store and whose softer side of late has been the sales and profits from selling clothes and appliances.

The more important part of the business -- about two thirds of operating earnings -- comes from its various credit-card operations, long a mixed blessing for Sears.

The credit-unit blessing is mixed because on the one hand, obviously, it generates profits. On the other hand, concerns about the business (bad debt, delinquencies, etc...) have been a constant worry for Sears (S: Research, Estimates) and its investors as well as a distraction to management.

To rectify the situation, on Tuesday Sears took out the cheapest, most powerful ad it could find in order to put its credit-card operation on the block -- it leaked word to major newspapers that it had retained Goldman Sachs to sell the unit.

Though Sears CEO Alan Lacy declined to comment Wednesday in a conference call with analysts on what he thinks the credit operation is worth, his bankers whispered to reporters that it should fetch as much as $7 billion.

That's an interesting figure, considering that before Wednesday's 13 percent increase in the value of Sears shares, the entire company was worth about $6.8 billion.

The company speaks of "unlocking" the value of its retailing unit by jettisoning the credit-card operation. But what if the key opened the door that revealed a retailer that truly isn't worth anything?

Slicing the pie ever thinner
I commented here late last year on the myriad stocks a buy-and-hold owner of AT&T from the early 1980s would have today.

Now I think I've found a company that's aiming to be a worthy competitor in the spin-off race: the various remnants of the old Rockwell International.

Recently by Adam Lashinsky

NYSE: Who's minding the store?

Take your profits

We win, then what?



Had you bought shares of Rockwell in the mid-1990s and never entered a sell order, today you'd own -- by my count -- shares of five companies, with the list growing rapidly.

Milwaukee-based Rockwell Automation (ROK: Research, Estimates), technically is the survivor to the former Rockwell International, which sold its rocket-technology business to Boeing in 1996.

Rockwell Collins (COL: Research, Estimates), used to be Rockwell's avionics division and is in Cedar Rapids, Iowa.

Troy, Mich.-based ArvinMeritor (ARM: Research, Estimates), is partly Rockwell's former automotive parts business.

And Conexant (CNXT: Research, Estimates), Rockwell's one-time semiconductor unit, is doing its share first by having spun off a chip company in Woburn, Mass., called Skyworks Solutions (SWKS: Research, Estimates), and, soon, its Internet gear unit, Mindspeed Technologies, a deal announced Tuesday.

And there could be more. Last year Conexant "contributed" its wafer fabrication facility to a venture with the Carlyle Group (of defense industry and Mideast connections fame) called Jazz Semiconductor. Should that enterprise be successful it wouldn't be a surprise to see it spun off to Conexant shareholders.

Imagine the banking fees.


The link:

http://money.cnn.com/2003/03/26/commentary/bottomline/lashinsky/index.htm

 

Re: Re: Re: Sears Card For Sale!!!!!!!!!!!!!!!!

Sears is having the sale of the century and its not Craftsman tools, DieHard batteries, Kenmore appliances, or Lands End clothing. Sears is looking to sell its credit card business to raise cash to get back to what it does best, namely, sell stuff. Sears started its credit card business more than 40 years ago to help drive retail sales. The Sears Card became synomous with "Easy Credit." It ended up delivering more profits than the rest of Sears' businesses. Last year, Sears credit card business generated more than $1.5 billion of operating income while its retail-related businesses delivered $1.2 billion in operating income. In 2000, Sears began offering a MasterCard to upgrade existing Sears store credit cardholders to a general purpose credit card. As a result, the Sears MasterCard has become the 10th largest VISA and MasterCard program in the USA. Among all credit card issuers, including American Express and Discover, Sears is the 12th largest U.S. issuer. In 2002, the Sears MasterCard program grew from $5 billion to $12.3 billion in credit card loans last year, making it one of the fastest growing bank credit card issuers in the country. But, the economy turned sour over the past two years. Sears is now facing the challenge of managing a huge and rapidly growing credit card business with 25 million cardholders in an environment where many consumers are having trouble paying their bills. If you have between $5 billion and $7 billion in cash laying around, plus access to the credit markets you might be able to take advantage of the sale of the century.



The link:

http://www.cardweb.com/cardtrak/news/2003/march/27a.html

 

Re: Re: Re: Sears Card For Sale!!!!!!!!!!!!!!!!

Sears to Evaluate Strategic Alternatives For Credit and Financial Products Business

HOFFMAN ESTATES, Ill., Mar 26, 2003 /PRNewswire via COMTEX/ -- Sears (NYSE: S) announced today that it is evaluating strategic alternatives for the company's Credit and Financial Products business, including its possible sale, in order to create value for all investors and focus on its profitable core Retail and Related Services business.
Sears' Credit and Financial Products business manages the eighth largest U.S. credit card portfolio with $30.8 billion in card receivables at year-end 2002, representing approximately 25 million active accounts. The business has the nation's largest in-house, proprietary card portfolio with $18.4 billion in Sears Card receivables, as well as $12.4 billion in MasterCard receivables. The business generated more than $1.5 billion of comparable operating income in 2002.

"Sears' Credit and Financial Products business is extremely attractive and highly profitable," said Alan J. Lacy, chairman and chief executive officer. "It continues to perform well and is on track to deliver on its 2003 financial plan. However, we believe the tremendous value and earnings power of these assets are not reflected in today's market valuation of Sears. By selecting the right strategic partner for this unique business, we believe we can create significant value for our investors.

"This strategic action will support our sharpened focus on strengthening and growing Sears' profitable Retail and Related Services business, while further streamlining our organization, reducing leverage and returning cash to shareholders," said Lacy.

Sears' Retail and Related Services business delivered more than $31 billion in revenue and $1.2 billion in operating income in 2002, a 28 percent increase over 2001 on a comparable basis, and generates significant free cash flow. The company is the No. 1 retailer of home appliances, fitness equipment and lawn mowers, and holds leading positions in many other categories. In addition, Sears is the exclusive provider of several leading brands, including Kenmore, Craftsman, Lands' End and DieHard. Sears owns a substantial direct-to-customer operation and is the largest U.S. product repair service provider, making 14.5 million service calls annually.

The company expects to conclude its review of strategic alternatives for the Credit and Financial Products business and take any related actions that arise from this review in the second half of 2003.

Webcast Scheduled

Sears will webcast an analyst and investor conference call this morning at 9:00 a.m. Eastern / 8:00 a.m. Central time. The call will be webcast live over the Internet at Sears.com. To access the webcast, click on "Investor Relations" and select "Events and Webcasts." A replay of the call will be available on the Web site for approximately one week. Software necessary to listen to the webcast, Windows Media Player or Real Player, can be downloaded from the webcast site. Downloading the software may take up to 22 minutes with a 56K speed modem.

About Sears

Sears, Roebuck and Co. is a broadline retailer with significant service and credit businesses. In 2002, the company's annual revenue was $41.4 billion. The company offers its wide range of apparel, home and automotive products and services to families in the U.S. through Sears stores nationwide, including approximately 870 full-line stores. Sears also offers a variety of merchandise and services through its Web site, www.sears.com. In June 2002, Sears acquired Lands' End, a direct merchant of traditionally styled, classic Lands' End clothing offered to customers around the world through regular mailings of its specialty catalogs and online at www.landsend.com.

Forward-Looking Statements

This press release and this morning's webcast contain statements about the Company's expectations regarding possible strategic alternatives for its Credit and Financial Products business and the timeline for completing a review of such alternatives, as well as statements about the Company's 2003 financial plan, and other statements about future Company performance. These are forward-looking statements based on assumptions about the future that are subject to risks and uncertainties, and actual results may differ materially from the results projected in the forward looking statements. For example, there can be no assurances that the Company will identify an acceptable purchaser or negotiate acceptable terms for the sale and ongoing operation of all or part of its Credit and Financial Products business and there can be no assurances as to the timing of such a transaction or transactions. These outcomes depend on many factors outside the Company's control, such as the willingness of third parties to accept terms that are acceptable to the Company. Further risks and uncertainties that may cause actual results to differ materially include competitive conditions in retail and credit; changes in consumer confidence and spending; delinquency and charge-off trends in the credit card portfolio; consumer debt levels and the level of consumer bankruptcies; the success of initiatives to address increased delinquencies and credit losses and improve credit profitability; the success of the Full-line store strategy and other strategies; the possibility that the Company will identify new business and strategic options for one or more of its business segments, potentially including selective acquisitions, dispositions, restructurings, joint ventures and partnerships; Sears' ability to integrate and operate Lands' End successfully; the successful integration of Sears retail businesses with a third-party credit card program, which involves significant training and the integration of complex systems and processes; the outcome of pending legal proceedings; anticipated cash flow; social and political conditions such as war, political unrest and terrorism or natural disasters; the possibility of negative investment returns in the Company's pension plan; changes in interest rates; the volatility in financial markets; changes in the Company's debt ratings, credit spreads and cost of funds; the possibility of interruptions in systematically accessing the public debt markets; general economic conditions and normal business uncertainty. In addition, Sears typically earns a disproportionate share of its operating income in the fourth quarter due to seasonal buying patterns, which are difficult to forecast with certainty. The Company intends these forward-looking statements to speak only as of the time of this release and does not undertake to update or revise them as more information becomes available.

The link:

http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=S&script=410&layout=7&item_id=394308