Kohl’s Department Stores will transfer its entire private-label credit card portfolio to Capital One Financial. This move has executives for both companies saying it will support the growth of the retailer’s credit card business.
Kohl’s announced on Tuesday that it had completed expansion of its private label credit card portfolio transfer to Capital One (NYSE:COF), the 13th largest U.S. bank by assets. Kohl’s said it would continue to manage all customer service, advertising and marketing initiatives supporting its credit card accounts, and that its current customers would continue to receive the same benefits.
Kohl’s credit card business accounted for more than 50% of its sales in 2010, according to the store’s senior executive vice president and chief financial officer, Wes McDonald, who said in a statement that the bank was a “strong fit for Kohl’s from both a cultural and financial perspective”.
Capital One’s executive vice president of card partnerships, Bill Cilluffo, called Kohl’s an “exceptional brand” in the same statement.
“Private label credit cards account for a significant percentage of all retail credit card balances and we see this alliance as a tremendous growth opportunity for Capital One’s card business,” said Cilluffo.
Through the seven-year business union, Capital One will now acquire more than 20 million of the retailer’s existing Kohl’s charge accounts.
Kohl’s currently operates over 1,000 store locations in 49 states and appeals to a family-focused and money conscious demographic. Some competitors of the retailer include Target Corp., J.C. Penney Corporation, Inc. and Sears, Roebuck and Co. Capital One had $122.2 billion in deposits at the end of 2010, and roughly 1,000 branches throughout the Northeast and Texas.