This article discusses Sainsbury’s sale of its Argos credit card portfolio as part of its strategy to reduce involvement in banking services.
- The £720 million deal transfers the portfolio to NewDay Group, aligning with the projected value of loan balances.
- About 20% of Argos sales have been supported by the credit portfolio, involving two million customers.
- NewDay Group will introduce a fresh Argos-branded digital credit solution to enhance customer payment options.
- Sainsbury’s continues to offload its banking arm, having announced another significant transaction with NatWest earlier this year.
Sainsbury’s has reached an agreement to sell its Argos credit card portfolio to NewDay Group for an expected £720 million. This move continues Sainsbury’s strategic shift away from its banking services, allowing the retailer to focus on its core business operations. The transaction aligns with the anticipated net value of loan balances at the end of the first quarter of next year.
The credit card portfolio has been a significant element for Argos, supporting 20% of its sales. It has provided a financial avenue for about two million customers to manage their purchases effectively. The shift of this portfolio signifies a substantial change in how Argos facilitates its customer transactions.
Sainsbury’s and NewDay have also planned to develop a new digital credit proposition branded under Argos. This initiative aims to replace the existing credit options with more modern, flexible, and convenient payment methods. Such innovation is expected to enhance the overall customer experience at Argos.
Sainsbury’s CEO, Simon Roberts, highlighted this partnership as a critical step in their long-term strategy. He emphasised working with partners that share their values and focus on customer needs. “NewDay is a complementary fit for us as we strive to give customers at Argos the best value and choice,” Roberts stated.”
Earlier in the year, Sainsbury’s announced its decision to sell most of its banking arm to NatWest Group. This transaction is set to complete in the first half of next year, marking another significant move in Sainsbury’s financial services reduction plan. Such steps illustrate Sainsbury’s ongoing commitment to streamline its operations and concentrate on its retail strengths.
The sale of Argos’s credit card portfolio is a decisive step in Sainsbury’s strategy to streamline and focus on its retail operations.
