SEATTLE and TORONTO, May 26, 2015 /PRNewswire/ — Nordstrom, Inc. (NYSE: JWN) and TD Bank Group (TD) (TSX and NYSE: TD) announced today an agreement under which TD will acquire Nordstrom’s existing U.S. Visa and private label consumer credit card portfolio, which currently totals approximately $2.2 billion in receivables. In addition, the two companies have entered into a separate long-term agreement under which TD will become the exclusive U.S. issuer of Nordstrom-branded Visa and private label consumer credit cards to Nordstrom customers.
This transaction enables Nordstrom to retain all aspects of customer-facing activities, aligning with Nordstrom’s strategy of enhancing the customer experience while allowing for improvement in capital efficiency.
“When we began this process a year ago, our number one goal was to continue to take care of our customers directly. We are pleased to meet this goal through our collaboration with TD, a premiere global financial institution and experienced credit card partner. We found TD to be a strong cultural fit, sharing our customer-focused approach and providing capabilities to help us further enhance the customer experience,” said Blake Nordstrom, co-president, Nordstrom, Inc.
“This agreement with Nordstrom, achieved through great partnership and collaboration, continues the success of our growing North American credit card business,” said Bharat Masrani, Group President and CEO, TD Bank Group. “TD will be working with one of the most highly respected retail brands in the world and one with a well-established, national customer base. We are excited that they have chosen us as their credit card partner.”
Under the agreement, Nordstrom will sell its credit card receivables to TD at the time of closing. The companies have also entered into a long-term program agreement under which TD, as exclusive issuer in the U.S., will own Nordstrom Visa and private label consumer credit card accounts and fund the associated receivables. Nordstrom will continue to perform account servicing functions, maintaining the current deep integration between its credit and retail operations. Nordstrom will continue to fund and manage the Nordstrom Rewards loyalty program, Nordstrom debit cards, and Nordstrom employee accounts. The terms of the Nordstrom Rewards loyalty program will remain unchanged as a result of this transaction. Nordstrom will be entitled to receive a substantial portion of net revenue generated by the credit card accounts.
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