Having learned a few lessons from overseeing collections and customer service at Sears, Roebuck & Co., Anthony Marino has taken the helm of the debt specialist Nationwide Credit Inc.
Last month Mr. Marino left the troubled retailer to become the president and chief executive officer of Nationwide, a Kennesaw, Ga., company that manages about $10 billion of accounts receivables for creditors. But he said in an interview that it was the opportunity to run his own business, not the problems at Sears, that influenced his decision.
Sears' credit business has suffered high chargeoffs since converting from store cards to MasterCards over the last few years. This year, for instance, chargeoffs are expected to weigh in at 7%. In October, credit chief Kevin Keleghan was fired for mismanaging the portfolio, which consists of $12 billion of MasterCard and $18.5 billion of private-label loans. Mr. Keleghan - who hired Mr. Marino in 1997 to turn around collection efforts - is suing for defamation and to get severance benefits.
Mr. Marino, 46, said he does not think that the credit business has been mismanaged. "The results of our collections efforts were tremendous," he said. "We lowered writeoffs during that period and they remain at very good levels today." Compared with the rest of the industry right now, a 7% chargeoff rate is standard, he said.
After taking charge of collections, Mr. Marino took over general operations at the division while Mr. Keleghan oversaw profit and loss. Mr. Marino was also responsible for payment processing, customer service, and telemarketing for the entire company.
The influx of all-purpose credit cards into the portfolio did not have a notable impact on collections activity or even require an increase to collections staff, he said. "The absolute number of delinquent accounts was not substantially different than what it had been when there was just the Sears card," he said. "It grew maybe roughly 10%, but it was nothing to tax the infrastructure."
In Sears' heyday, Mr. Keleghan often boasted about "the water-heater phenomenon," or the tendency of distressed consumers to pay their Sears bill first. But Mr. Marino said such a notion cannot be quantified and is "probably a diminishing phenomenon" anyway.
At Nationwide - whose clients include American Express Co., Providian Financial Corp., and Capital One Financial Corp. - Mr. Marino says he will apply the Sears practice of giving collections agents autonomy in working out payment arrangements. Other collections departments could lower notoriously high turnover rates if they let individual agents "take responsibility for the customer issue as opposed to passing it off to someone else," he said.
Mr. Marino succeeds Michael Lord, who was brought in five years ago to restructure Nationwide when it was $130 million in debt. Mr. Lord left in November, after reducing the debt to $30 million.
