Wells Fargo (WFC) has reached a deal to issue private-label and co-branded credit cards with the department store chain Dillard's (DDS).
The agreement, announced Tuesday, has a 10-year term and will likely start in the fourth quarter. Financial terms were not disclosed.
The San Francisco bank will succeed GE Capital Retail Bank as the administrator of the Dillard's credit card program, according to information on the Dillard's website. General Electric is preparing to spin off its North American consumer lending unit, which includes the company's private-label card business.
For Wells Fargo, the Dillard's deal represents another step in its efforts to build up its credit card business, an area where it trails its big-bank competitors.
"We look forward to bringing Wells Fargo's proven marketing and underwriting capabilities, as well as new rewards strategies, to Dillard's," Tom Wolfe, head of consumer credit solutions at Wells, said in a news release.
Dillard's President Alex Dillard said in the news release that the company talked with a number of potential bank partners before reaching a deal with Wells. Dillard's also stated that it believes its earnings from the Wells Fargo program will be comparable to its historical earnings from Dillard's branded credit cards, after subtracting startup costs.
Dillard's currently offers two credit cards one private label, and the other co-branded with American Express. Both of those cards are issued by GE Capital Retail Bank, according to the Dillard's website.
Little Rock, Ark.-based Dillard's operates roughly 300 stores throughout the South, Midwest and western United States.