|Sears Canada to Evaluate Strategic Alternatives for Credit and Financial Services|
TORONTO, Jun 13, 2005 (Canada NewsWire via COMTEX) -- Sears Canada Inc. (TSX: SCC) announced today that it is evaluating strategic alternatives for the Company's Credit and Financial Services business, including its possible sale, to generate additional shareholder value and increase focus on Sears merchandising business.
The Credit and Financial Services business generated approximately $100 million of operating income in 2004. Sears Canada Bank, the Company's wholly-owned federally regulated Schedule I bank, extends credit to qualified customers by means of the Sears Card and Sears MasterCard and provides a range of related services. The Sears Card is Canada's largest in-house proprietary retail credit card portfolio with approximately $2.3 billion in receivables as at April 2, 2005. The Sears MasterCard portfolio had approximately $200 million in receivables as of the same date. Together, the Sears Card and Sears MasterCard form the third largest credit card portfolio in Canada with approximately four million active accounts.
"Sears Canada's Credit and Financial Services business has been an important part of our Company's operations," said Brent Hollister, President and Chief Executive Officer. "It has contributed strong earnings while supporting the marketing initiatives of our merchandising business through a range of consumer financing options and loyalty programs. We believe that pursuing a strategic alternative in the current favourable market will maximize shareholder value. In addition, the Credit and Financial Services business, operated by a strategic partner, can benefit from expanded growth opportunities while continuing to complement our merchandising business. Such action will also allow us to continue to focus on our ongoing strategic growth initiatives to increase the profitability of our merchandising operations."
As strategic alternatives are being reviewed, there will be no change in the manner in which Sears customers currently use the Sears Card or Sears MasterCard. "We expect no changes to a Sears Card Holder's experience," added Mr. Hollister. "Programs we have traditionally offered on the Sears Card, such as Sears Club and payment options for big-ticket merchandise, will continue to form part of our ongoing marketing initiatives and will be enhanced by additional product offerings and services."
The Company expects to conclude its review of strategic alternatives for the Credit and Financial Services business by the third quarter of 2005 and hopes to implement any decisions before year-end.
Goldman, Sachs & Co. has been retained to advise Sears Canada on its strategic alternatives. Goldman Sachs is a leading global investment banking, securities and investment management firm headquartered in New York, with offices in Toronto and Calgary.
This communication includes discussion of forward-looking information and potential future circumstances and developments. Discussion of such matters is qualified by the inherent risks and uncertainties surrounding future expectations generally, which discussion also may materially differ from the Company's actual future experience involving any one or more of such matters.
Sears Canada is a multi-channel retailer with a network of 122 full-line department stores, 219 off-mall stores, 64 home improvement showrooms, over 2,200 catalogue merchandise pick-up locations, 113 Sears Travel offices and a nationwide home maintenance, repair, and installation network. The Company also publishes Canada's most extensive general merchandise catalogue and offers shopping online at www.sears.ca.
Vincent Power, Sears Canada, Corporate Communications, (416) 941-4422,