HOFFMAN ESTATES, IL: Sears Roebuck& Co. is working with financial communications firm Citigate Sard Verbinnen as the giant retailer begins to shop its credit-card operation.
News of the sale came as something of a surprise to much of the business media when it was announced.
A spokesman for Sears said that it has been working with Citigate Sard for two years, and will be working with the firm on the credit-card sale.
"This is a bold, strategic move to unlock value," said George Sard, CEO of Citigate Sard, in a statement to PRWeek. "Our job is to help communicate that."
Although the average consumer associates Sears with stores selling appliances, electronics, tools, and home furnishings, profits from Sears plastic represented 60% of the company's operating income last year. Sears is the third-largest MasterCard issuer, according to recent media reports.
The Wall Street Journal called the move "one of the most significant changes in the company's 117-year history."
Sears and Sard have been working to communicate to the business press the rationale for trying to execute the move during one of the most bearish economic and financial environments in recent memory.
Early on, Sears felt that it would be easy to demonstrate that the sale was not a panic move, because it remains one of the few large retailers that does not outsource its credit-card operations, said a source close to the company's communications strategy. Indeed, nearly all of the business media made that point in their coverage of the announcement. Other giant retailers that outsource their credit-card portfolios include Home Depot and Wal-Mart.
The company has also been quick to highlight that the Sears credit-card portfolio, which is the eighth-largest in the country, is the only one in the top 10 that is not owned by a major financial institution.
Sears also hopes to frame what it feels is a unique opportunity for potential buyers to acquire one of the largest credit-card portfolios. It also wants to relay to investors that a large financial institution would be in a better position to unlock the value of the portfolio.
The company was concerned that early media calculations overstated the so-called "premium" Sears would need to fetch in order to get that total, said the source. The premium represents the amount over the on-paper value the buyer might pay for an asset.
Nevertheless, Sears' communications challenges are unlikely to end after the sale of its credit unit. It faces an uphill battle to convince Wall Street that it has a long-term strategy to counter Wal-Mart's dominant position in the retailing space.