Ahead of the planned sale of its credit card arm to Capital One Financial Corp., HSBC North America has renewed its private-label credit card agreements with Saks Inc. and three other retailers.
The company announced Thursday that its card and retail services unit will continue managing the card programs of Saks, Darvin Furniture, Big Lots stores and Jordan's Furniture until the card division's pending sale to Capital One closes. At that point, Capital One would take over management of the accounts, HSBC said.
HSBC North America, a unit of the global giant HSBC Holdings PLC, is the seventh-largest credit card provider in the U.S. and the third-largest issuer of private-label cards. As part of its parent company's initiative to streamline operations and focus largely on corporate and private banking, HSBC North America announced in August that was selling its $30 billion card business to Capital One for roughly $2.6 billion.
That deal is expected to close in the first half of 2012. HSBC is also selling its 195 of its retail branches in upstate New York and Connecticut to First Niagara Financial Group Inc. of Buffalo for about $1 billion. That sale is also expected to close in the first half of the year.
HSBC's card unit has been managing Saks accounts since 2003. Saks' two brands operate more than 100 stores throughout the world. Its partnership with Big Lots, a closeout retailer with more than 1,400 stores in the U.S., dates to 2005 and its relationships with regional retailers Darvin and Jordan's go back to the 1980s and 1990s.