By Judy McKinnon
J.P. Morgan Chase & Co. will end its credit-card issuing
deal with Sears Canada Inc. next November when the program is set
to expire, the companies said Monday, marking another setback for
the struggling Canadian retailer.
Toronto-based Sears, which has been working to reposition
itself, said J.P. Morgan would continue to service the Sears Card
and Sears MasterCard credit cards until Nov. 15, 2015.
The two plan to work together to explore a sale of the
credit-card program. If a sale is reached, J.P. Morgan has agreed
to pay up to 174 million Canadian dollars ($154 million) to the
retailer under certain circumstances, the companies said.
The latest development comes just a month after the retailer's
parent, Sears Holdings Corp., unveiled a plan to sell off most of
its 51% stake in the Canadian unit to its shareholders by way of a
rights offering. The Canadian retailer, whose chief executive
resigned earlier this year after a year at the helm, has also faced
competitive pressures from the entry of a number of large U.S.
retailers into Canada in recent years.
The number of credit cards managed by J.P. Morgan under the
Sears Canada program wasn't disclosed.
"Our customers will be able to continue to use their Sears
Canada cards through to November 2015 and we expect no
interruption, with the same service levels provided previously by
J.P. Morgan Chase," Ron Boire, Sears Canada's acting chief
executive, said in a statement Monday. "In the interim, we will
explore options that will enable us to continue to provide the high
level of service to which Sears Canada customers are
accustomed."
Sears Canada sold its credit and financial services business to
J.P. Morgan in 2005 for about C$2.2 billion.
Sears Canada will report its fiscal third-quarter results
Tuesday.
Write to Judy McKinnon at judy.mckinnon@wsj.com
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