Ideon Group Inc. announced plans to revamp its floundering PGA Tour Partners credit card and cut 27% of its work force, resulting in a $34.2 million writedown.
The Jacksonville, Fla.-based company also said Monday that it had closed its Family Protection Network, a service for reporting missing children. Ideon, parent of the credit card marketing firm SafeCard Services, said it is considering whether to maintain the system's child registration feature as an enhancement program.
Ideon plans to dismiss about 375 workers on its corporate staff and at SafeCard Services, a 27% cut. Severance, facilities abandonment, and asset writedowns will result in a charge of $34.2 million in the quarter that ended June 30, the company said Monday.
"Today is a difficult day for everyone at Ideon, and I am disappointed about the failure of our recent product initiatives and the resulting impact on the company, our employees, and shareholders," said Paul G. Kahn, Ideon's chairman and chief executive, in a written statement.
Ideon remains optimistic that the PGA credit card can be salvaged.
"We're discontinuing the marketing program that we launched in March, and we're testing alternative membership programs" such as combined credit card and membership initiatives, said Holly Anderson, an Ideon spokeswoman.
The PGA Tour Partners MasterCard, issued by Orlando-based SunTrust BankCard since March, was SafeCard's first cobranding deal. Mr. Kahn had predicted the PGA card would pull in between 500,000 and one million cardholders within two years.
William J. Moore, president and chief executive officer of SunTrust BankCard, is optimistic about the PGA card's future. "There's a helluva lot of golfers out there who don't have this card and haven't gotten our literature. It's just a matter of identifying them," he said.
"We still feel it's a very viable product, and we definitely expect to continue offering it," said Mr. Moore, who said results of the new testing should be known by the end of the year.
The PGA Tour Partners affinity program, which was started in 1991, distributed $6 million through PGA Tour charities during its first three years, the company said.
Ideon, which SafeCard created as it moved to a holding company structure last December, has had its share of woes lately. The company has been besieged by a series of lawsuits and full-page newspaper ads taken out by Peter Halmos, SafeCard's founder, who was ousted as chairman in 1992.
It was unclear how the changes would affect Ideon's move to the American Express Regional Operating Center in Deerwood Park, Fla. The company did say that its operations there would be consolidated from five to two locations by the end of 1995.
Ideon announced its planned move from Cheyenne, Wyo., to the 350,000- square-foot facility late last year. The purchase was the centerpiece of SafeCard's diversification from a single-product, credit card enhancement company to more of a conglomerate.
Among Ideon's subsidiaries is Wright Express of Portland, Maine. Acquired in 1994, Wright Express provides enhanced payment and information services to commercial vehicle fleets.