Kohl’s selling credit card business to JPMorgan Chase
March 6, 2006-- Home Textiles Today,
Menomonee Falls, Wis. – Kohl’s will sell its private label credit card accounts and outstanding balances to JPMorgan Chase for a cash payment projected at about $1.5 billion. The agreement provides for Kohl’s to maintain the marketing, customer service and related operations of the credit card business, and to receive regular payments for these services.
Kohl’s chairman and ceo Larry Montgomery noted, “This transaction…converts our receivables to cash while allowing us to continue to service our customers and participate in the ongoing growth and profitability of our credit business.”
Some of the proceeds will be used by Kohl’s to fund a newly announced $2 billion share repurchase program over the next two to three years. The influx of cash and the expected rise in share price during the repurchase program has led the company to raise its 2006 earnings guidance from $2.72 to $2.85 per diluted share to $2.74 to $2.87 per diluted share.
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