Target Could Shed Credit Card Assets
September 17, 2007,
Target Corp. will "review potential ownership alternatives" for its $7 billion credit card receivables, noting that its review with the help of Goldman Sachs will be complete by the end of December. The review will also entail re-evaluating its use of debt in its capital structure and its pace of share repurchases.
Target said it is one of the 10 largest issuers of credit cards in the United States, and believes that the credit card business helps "drive incremental sales, deepen our relationship with our guests and reinforce our brand," said Bob Ulrich, chairman and ceo.
Target cfo Doug Scovanner noted that the Target receivables portfolio has "a unique combination of attributes which include strong double-digit growth, a consistently high yield and unprecedented integration with our retail operations."