Sears gets cash infusion in credit card deal
Sears is financing its turnaround plan in part with a $425 million cash infusion thanks to an expanded credit card deal with Citi.
Sears announced Monday it is extending and enhancing its deal with the bank for a Mastercard branded with the retailer's Shop Your Way loyalty program. Citi is paying $425 million as part of the arrangement.
“We’re extremely proud of our longstanding relationship with Citi and are excited that this best-in-class offer which rewards Shop Your Way members for activity in their daily lives is now an ongoing part of the value proposition for cardholders,” said Edward S. Lampert, Chairman & CEO of Sears Holdings. “The Shop Your Way Mastercard is a cornerstone of the Shop Your Way engagement platform which provides generous rewards, partnerships and experiences. We saw a strong volume of card issuances in 2017 and we look forward to building on that momentum as the power of the Shop Your Way platform allows us to personalize experiences and make life easier and more rewarding for every cardholder.”
Shop Your Way Mastercard cardholders will now enjoy generous benefits every day that previously were only available on a promotional basis. These cardholders will automatically earn more Shop Your Way points, including:
- 5% back in points on eligible purchases made at gas stations;
- 3% back in points on eligible purchases at grocery stores and restaurants; [5% and 3% back on the first $10,000 of combined eligible purchases made annually on gas, groceries and restaurants and 1% thereafter]
- 2% back in points on eligible purchases made at Sears and Kmart; and
- 1% back in points on all other eligible purchases.
Points can easily be redeemed on purchases ranging from everyday household consumables sold at Kmart to larger items such as kitchen appliances sold by Sears or towards a pair of glasses at Sears Optical. There is no minimum redemption threshold and no need for certificates or gift cards – members can see their points online or on their Shop Your Way app and instantly redeem them towards purchases in store or online. Points earned with the card are also combinable with other Shop Your Way point offers through Shop Your Way partners such as Uber and Uber Eats, Gas Buddy, Avis Budget Group, Synapse (division of Meredith), fuboTV, Truxx and more. Visit shopyourway.com for more information on how to earn points.
“We are pleased to extend our long-standing, successful relationship with Sears. The extension provides for strong long-term economic value for both Citi and Sears, and we are especially proud to provide enhanced benefits to our Shop Your Way Mastercard cardmembers every day, at the places they shop most,” said Craig Vallorano, Head of Citi Retail Services. “Consistent with other top-of-wallet credit cards, more than 70% of customer spend on our Citi-Sears general purpose cards occurs at merchants beyond Sears, so this enhanced rewards structure is designed to deliver strong value for Shop Your Way card customers as well.”
The shared economics of the program will remain substantially consistent with the existing agreement through Dec. 31, 2020, and will be performance-based thereafter. The amendment removes Sears’ right to purchase certain portfolio assets previously included in the program, and for the term of the extension, removes its purchase right to the remaining program assets. Sears will have the right to purchase remaining program assets in certain circumstances, including at the end of another extension term (if it elects to extend the program and subject to the satisfaction of certain conditions).